Supreme Court order on consumer-related services

The Supreme Court on Thursday said consumers cannot be required to pay for a service which they no longer received, and tariff determination is not merely a mathematical exercise but a regulatory balancing act. The apex court set aside a February last year order of the Appellate Tribunal for Electricity (APTEL) which had directed that entire capital cost of Rithala Combined Cycle Power Plant in Delhi be permitted to be recovered through depreciation over a period of 15 years.

A Bench of Justices PS Narasimha and Alok Aradhe delivered its judgement on an appeal by the Delhi Electricity Regulatory Commission (DERC) challenging the APTEL’s order. “The tariff determination is not merely a mathematical exercise but a regulatory balancing act. The object of enabling reasonable cost recovery for utilities must be weighed against and calibrated with, paramount obligation to safeguard consumer interest,” the Bench said.

It said in this case, admittedly, electricity was not supplied to consumers beyond March 2018. “The consumers cannot be required to pay for a service which they no longer received,” the top court said.