In a significant ruling, the Supreme Court has affirmed that State Electricity Regulatory Commissions (SERCs) retain oversight over inter-state power supply when it impacts their respective state grids. This decision clarifies the regulatory boundary between the Central Electricity Regulatory Commission (CERC) and state commissions under the Electricity Act, 2003.
While CERC governs inter-state electricity transmission, the Court ruled that SERCs can impose regulations on inter-state power transactions if they affect the local grid. The verdict upheld the Rajasthan Electricity Regulatory Commission’s (RERC) authority over the state’s power distribution network, even when electricity originates from outside Rajasthan.
The case centered around the Rajasthan Open Access Regulations, 2016, which imposed restrictions on simultaneous power drawal through open access and contracted demand from the distribution licensee. The regulations required consumers opting for open access power to reduce their contracted demand accordingly, while also introducing penalties for deviations. Challengers argued that these regulations infringed upon inter-state electricity trade, a domain under CERC’s jurisdiction.
However, the Supreme Court rejected this argument, stating that Section 42 of the Electricity Act empowers state commissions to regulate open access within their jurisdiction, ensuring fair distribution and stability of the local power network. The ruling emphasized that the key factor is not the source of electricity but its end-use within the state.
Dismissing the appeal, the Court reaffirmed that state commissions have a crucial role in overseeing intra-state power regulation, even when transactions involve inter-state suppliers.
