APTEL Reverses KSERC's Power Tariff Ruling

29 Aug 2024 CW Team

The Appellate Tribunal for Electricity (APTEL) recently overturned a Kerala State Electricity Regulatory Commission (KSERC) order, ruling that KSERC had overstepped its jurisdiction by intervening in a multi-state electricity dispute. The dispute centered around the generation and sale of solar power, which falls under the Central Electricity Regulatory Commission's (CERC) authority.

The issue began when the Solar Energy Corporation of India (SECI) issued a tender for 300 MW of solar power, structured under a Power Sale Agreement (PSA) with the Kerala State Electricity Board (KSEB).

The PSA, submitted for KSERC's approval, faced two significant alterations:

KSERC redefined “Appropriate Commission” to include both CERC and KSERC, potentially causing jurisdictional conflicts.

KSERC capped the tariff payable by KSEB at ₹2.44 (~$0.029)/kWh, even if CERC approved a higher rate for the solar power producer, ReNew Power.

SECI argued that the PSA and related agreements involved a composite scheme that required uniform regulation by CERC to avoid inconsistencies. KSERC defended its changes, citing its authority to regulate non-tariff aspects of the PSA under the Electricity Act 2003.

APTEL sided with SECI, ruling that KSERC's tariff cap and jurisdictional claims were inappropriate for inter-state transactions. The Tribunal emphasized that only CERC has the authority to regulate such matters, due to the interconnected nature of the agreements.

As a result, APTEL annulled KSERC’s modifications, reaffirming that CERC is the sole authority for all aspects of the PSA, including non-tariff disputes. This decision ensures consistency and prevents regulatory conflicts in multi-state electricity transactions.

Additionally, the Tribunal recently granted POWERGRID Southern Interconnector Transmission System a 289-day extension to complete a transmission project, acknowledging delays due to "force majeure" events.

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