The Supreme Court has recently held that the State Electricity Regulatory Commission has the power to refuse the adoption of tariff if it is not aligned with market prices. The court added that while adopting the tariff, the commission is bound to take into consideration the protection of consumer interest.
The bench of Justice BR Gavai and Prashant Kumar Mishra reversed the order of the Appellate Tribunal for Electricity (APTEL) and restored the order passed by the State Commission by ruling that the State Commission has the power to adoption of tariff only if such tariff has been determined through a transparent process of bidding. It also noted that the transparent process of bidding must be in accordance with the guidelines issued by the Centre.
The apex court underlined that according to Clause 5.15 of the Bidding Guidelines the bidder who has quoted lowest levelized tariff in accordance with evaluation procedure, shall be considered for the award. The court underscored that the clause also provides that the evaluation committee shall have the right to reject all price bids if the rates quoted are not aligned to the prevailing market prices.
The observations held by the Supreme Court resolves around three issues framed by the Appellate Tribunal for Electricity (APTEL) namely, whether the respondent commission could reject the tariff or bid of the appelant, in terms of Section 63 of the Electricity Act, 2003 and the direction issued by the Supreme Court. The top court earlier observed that the State Commission is the source of the power to regulate, which includes the power to determine or adopt tariffs.
Second, whether there was sufficient proof to show that the bid of the appellant was market aligned and whether the argument of Consumer interest be advanced by the Rajasthan Discoms in fact of the present appeal. The top court was hearing the civil appeals against the state commission.