The Kerala High Court on Wednesday (December 2) dismissed a writ petition filed by the Kerala State Electricity Board (KSEB) challenging the Central Electricity Regulatory Commission Regulations, 2020 contending that the regulations operated unfairly against electricity distribution licencees in the south zone.
A Single Judge Bench of Justice AK Jayasankaran Nambiar passed this judgment while observing that the network gains relevance where an electricity consumer and the power generating company are located in different states.
Maninder Singh, Senior counsel appearing for the petitioner, stated that the National Electricity Policy and the Tariff Policy can be
formulated only by the Central Government in consultation with the State Governments and the CEA. Any revision to the said policy can
also be only at the instance of the central government.The CERC
does not have any role in the formulation of the National Electricity
Policy and the Tariff Policy.
Section 61 of the Act also mandates that the terms and conditions for determination of tariff are subject to the provisions of the Act and shall be guided by the National Electricity Policy and the Tariff Policy. The power to make Regulations under Section 178 is also subject to similar conditions, he added.
Nikhil Nayyar, the senior counsel appearing for the CERC, contended, The original tariff policy of 2006 was amended in 2016 to specifically ensure that the utilization factor duly captured the advantage of reliability reaped by all users of the transmission system. It was also envisaged that the spread between the minimum and maximum transmission rates, which was disparate, was such as not to inhibit planned development/augmentation of the transmission system, while at the same time discouraging non-optimal transmission investment. The said amendment to the policy was necessitated on account of the synchronization of the other regional grids with the southern grid thus realizing the goal of one nation one grid.
Reliance on the judgments in Bhavesh D.Parish & Ors v. Union of India & Anr – [(2000) 5 SCC 471], U.P.Power Corporation Ltd v. NTPC Ltd & Ors. – [(2011) 12 SCC 400] and Reliance Infrastructure Ltd v. State of Maharashtra & Ors. – [(2019) 3 SCC 352] to contend that the Regulation having been framed by an expert body, after due consideration of commercial and economic factors.
The Bench found that there was nothing in the Electricity Act that mandated a specific mode for the fixing of charges. The variation in the mode of fixing charges did not by itself prove malafides.
“A consideration of the sequence of events that led to the framing of the impugned regulations, as also the new mechanism introduced therein for sharing of transmission charges and losses does not, however, show this to be true. The arguments of the petitioner lose sight of the fact that DIC’s accessing the IST network have to be seen as integral components of a single network that connects the entire nation,” observed the High Court.
The Court also noted, “The Bakshi committee and the Jha committee were constituted to offer suggestions as regards a methodology for sharing of transmission charges and losses by the users of the Inter State Transmission Network (ISTN). Their suggestions can only be seen as recommendatory in nature, and in the absence of any material to suggest that the CERC did not take into account relevant aspects, or took into account irrelevant aspects while framing the impugned regulations, this court would not be justified in interfering with the legislative exercise
undertaken by a statutory body.”
The petitioner had not placed before the Court material to demonstrate that irrelevant material was considered or that crucial material was not examined, the Court opined.