Frame regulations for determining power tariff in 3 months: SC to state electricity regulatory commissions

New Delhi, November 23

The Supreme Court on Wednesday directed all State Electricity Regulatory Commissions to frame in three months necessary regulations under the Electricity Act, 2003 on the terms and conditions for determination of tariff.

While framing these guidelines on the determination of tariff, the commission shall follow the principles prescribed under Section 61 of the Electricity Act, 2003, including the National Electricity policy and the National Tariff Policy, a three-judge Bench led by Chief Justice of India DY Chandrachud said.

“The regulations framed must be in consonance with the objectives of the Electricity Act, 2003 which is to enhance the investment of private stakeholders in the electricity regulator sector so as to create a sustainable and effective system of tariff determination that is cost-efficient so that benefits percolate down to the end consumer,” the top court said.

The Bench dismissed Tata Power’s petition challenging the award of Rs 7,000 crore Maharashtra Electricity Regulatory Commission (MERC) transmission contract to Adani Power. Tata Power had challenged the award of the project without a tariff-based competitive bidding.

The top court clarified that in states where the commissions have already framed such regulations, they have to amend it to include provisions for criteria for choosing the modalities to determine the tariff, in case they are not included.

The state commissions should follow the objectives of the Electricity Act to effectuate a sustainable model for electricity regulation, taking note of the specific needs of their respective states, it court said.

The Electricity Act gave sufficient flexibility to regulate the intra-state transmission system and the state Commissions had the power to determine and regulate tariff, it said.