The Electricity Act, 2003, the Supreme Court has upheld the authority of State Electricity Regulatory Commissions (SERCs) to regulate open access even in cases of inter-state power supply, provided it impacts their respective state grids.
The Court clarified that while the Central Electricity Regulatory Commission (CERC) primarily governs inter-state electricity transmission, this does not eliminate the role of SERCs in overseeing electricity supply that affects state distribution networks.
The Supreme Court stated:
“Section 79(1)(c) of the Act of 2003 defines CERC’s authority over inter-state electricity transmission. However, this does not strip State Commissions of their jurisdiction over intra-state aspects of open access. Section 42(2) empowers State Commissions to regulate open access within their respective states, ensuring fair and non-discriminatory transmission and distribution.”
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This interpretation affirms that even when electricity is procured from another state, the concerned State Commission maintains oversight if the transaction impacts its grid system.
The case originated from a challenge to the Rajasthan Open Access Regulations, 2016, which imposed conditions on open access consumers. These regulations limited simultaneous drawal of power through open access and contracted demand from the distribution licensee. Consumers opting for open access had to adjust their contracted demand, with penalties imposed for overdrawal or under-drawal beyond permitted limits.
The appellants contested the Rajasthan Electricity Regulatory Commission’s (RERC) jurisdiction, arguing that:
- The Electricity Act, 2003 exclusively vests CERC with authority over inter-state open access.
- Regulation 26(7) of the 2016 Rules restricted the ability of consumers to procure power from other states, violating the Act’s provisions.
- The requirement for a 24-hour scheduling period, advance power usage intimation, and a minimum consumption threshold of 75% of scheduled power was beyond the jurisdiction of a state commission.
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The Rajasthan Electricity Regulatory Commission (RERC) defended its authority, stating that:
- Under Section 42, RERC has jurisdiction over open access within Rajasthan, even if power is sourced from outside.
- Electricity entering Rajasthan’s grid falls under RERC’s control for transmission and distribution, including charges applicable for such transactions.
The Supreme Court ruled in favor of RERC, affirming that state commissions can regulate inter-state power supply when it affects the local electricity grid.
Justice Vikram Nath, delivering the judgment, stated:
“While inter-state transmission is under CERC as per Section 79(1)(c), State Commissions retain authority under Section 86(1)(c) to regulate intra-state transmission and distribution. The 2016 Regulations do not seek to control inter-state transmission but rather ensure that transactions impacting the Rajasthan grid remain under the oversight of the State Commission.”
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The Court further observed:
“The determinant is not the power’s source but its end-user and delivery within Rajasthan’s intra-state grid. The Act ensures that intra-state regulatory matters remain under the respective State Commissions, preventing any dilution of their jurisdiction.”
By reaffirming State Commissions’ authority over electricity supply affecting their grids, the Supreme Court has reinforced the balance of power between CERC and SERCs, ensuring that states maintain control over their energy distribution infrastructure.
Case Title: RAMAYANA ISPAT PVT. LTD. AND ANR. VERSUS STATE OF RAJASTHAN & ORS.
Appearance:
For Appellant(s) Mr. Manu Seshadri, Adv. Mr. Sahil Manganani, Adv. Ms. Aakriti Gupta, Adv. Mr. Siddhant Singh, Adv. Mr. Nikunj Dayal, AOR Mr. Kumar Mihir, AOR Mr. Athul Joseph, Adv. Mr. Gunjan Sharma, Adv.
For Respondent(s) Mr. Shiv Mangal Sharma, A.A.G. Mr. Milind Kumar, AOR Mr. Zoheb Hossain, AOR Dr. Rupesh Singh, Adv. Mr. Guru Prasad Singh, Adv. Mr. Anshul Suri, Adv. Mr. Satya Veer Singh, AOR 1 Ms. Pratibha Jain, AOR Ms. Christi Jain, Adv.(V.C.) Mr. Pallav Mongia, AOR Mr. Anubhav Mishra, Adv. Mr. Amritesh Krishna, Adv.
