Regulatory Developments in Power Distribution Sector: June 2, 2025

APTEL upholds regulatory order on tariff and VCA charge disputes in Chhattisgarh

The Appellate Tribunal for Electricity (APTEL) on 15 May 2025 ruled on Appeal No. 286 of 2017, filed by Chhattisgarh State Power Distribution Company Ltd (CSPDCL), challenging a 2017 tariff order issued by the Chhattisgarh State Electricity Regulatory Commission (CSERC). The appeal raised six key issues related to annual revenue requirement (ARR) calculations and billing of Variable Cost Adjustment (VCA) charges.

The appeal stemmed from CSERC’s order dated 31 March 2017, which addressed final true-up for FY 2015-16 and tariff determination for FY 2017-18 for multiple state utilities. CSPDCL, one of the four distribution licensees, challenged the treatment of various financial components under the order.

APTEL upheld CSPDCL’s contention on one key issue. The Tribunal ruled that the Commission had wrongly deducted Rs 493.8 million in notional interest on excess consumer security deposits from the ARR for FY 2015-16. This deduction was found to be in violation of the MYT (Multi-Year Tariff) Regulations, 2012 and an earlier APTEL judgment in Appeal No. 308 of 2013.

APTEL also remanded the matter concerning erroneous computation of interest and finance charges for FY 2017-18. The Commission had reduced ARR by Rs 655.9 million, but failed to explain the calculation method for this deduction. APTEL directed CSERC to re-examine the issue and issue a revised decision within two months.

Three issues were either not pressed or dismissed. These included the treatment of government subsidy, the computation of Return on Equity (RoE), and the effect of the Ujwal DISCOM Assurance Yojana (UDAY) scheme on loan interest. The Tribunal noted that CSPDCL had itself requested RoE to be calculated at 15.5%, despite the regulation permitting up to 16%.

On the contentious issue of VCA charges, APTEL ruled against CSPDCL. It held that the company billed VCA for March 2017 despite CSERC’s explicit directive in the 31 March 2017 tariff order not to do so. APTEL found that the utility acted in haste to circumvent regulatory directions and failed to refund the charge to consumers.

Appeal No. 286 of 2017 | Read the full order here.

APTEL issues notice on non-compliance plea against MSEDCL over wheeling and transmission charges

The Appellate Tribunal for Electricity (APTEL) has admitted contempt petition of 2025 filed by Laxmi Organics Industries Ltd against Maharashtra State Electricity Distribution Company Ltd (MSEDCL), alleging non-compliance with APTEL’s judgment dated 23 October 2024 in Appeal Nos. 245 and 376 of 2018.

The petitioner claimed MSEDCL continued to levy wheeling and transmission charges despite the Tribunal’s ruling which had expressly barred such charges. Laxmi Organics argued that its premises were directly connected to the transmission system and used dedicated lines, and therefore did not access MSEDCL’s distribution network. This position had been upheld by MERC in 2018 and affirmed by APTEL in its 2024 ruling.

Despite this, MSEDCL reportedly billed Rs 436.6 million in arrears including wheeling and transmission charges between October and December 2024. Laxmi Organics requested APTEL to direct MSEDCL to reverse the charges and approve its medium-term open access (MTOA) application for contract demand reduction from 5000 kVA to 2500 kVA.

MSEDCL responded that the charges were based on MERC’s 2019 (DOA) Amendment Regulations, which were not under challenge in the earlier appeal. It contended the 2024 APTEL order addressed the 2014 and 2016 regulations, and the 2019 rules were not part of that litigation. MSEDCL argued the levy was lawful under the amended regulations, and challenged the maintainability of the contempt plea, citing lack of jurisdiction under Section 146 of the Electricity Act and the pendency of a civil appeal before the Supreme Court.

Laxmi Organics countered that the 2019 regulations were not applicable, as its system remained unconnected to MSEDCL’s network. It argued that MSEDCL’s actions amounted to wilful non-compliance and sought directions to approve the open access application and reverse all contested charges.

The Tribunal issued notice to MSEDCL and listed the matter for further hearing. It clarified that while it would not act under Section 142 of the Electricity Act, the contempt plea under Section 146 would be considered.

Appeal No. CP No. 2 OF 2025 & IA No. 341 OF 2025 | Read the full order here.

APTEL allows SAEL to correct SLDC portal error 

On 27 May 2025, the Appellate Tribunal for Electricity (APTEL) set aside an order by the Uttar Pradesh Electricity Regulatory Commission (UPERC) that had denied SAEL Ltd (formerly Sukhbir Agro Energy Ltd) the right to rectify erroneous scheduling data on the State Load Dispatch Centre (SLDC) portal. The Tribunal ruled that the company made a bonafide error in entering generation and banking data between May and December 2020 and should be allowed to correct it.

SAEL had mistakenly reported its 15 MW actual capacity as “available capacity” and wrongly declared 12 MW as “banking” instead of zero. This mismatch led to Uttar Pradesh Power Corporation Ltd (UPPCL) withholding tariff payments worth Rs 92.6 million for October to December 2020. Although SLDC and UPPCL accepted and cleared bills from May to September based on joint meter readings, they refused to honour subsequent bills once the error was noticed.

UPERC dismissed SAEL’s plea to rectify the data, citing Clause 6.5.25 of the Uttar Pradesh Electricity Grid Code, 2007, which limits corrections to a five-day window. APTEL disagreed with this narrow interpretation and held that the clause did not prohibit rectification beyond five days, especially in the absence of contrary provisions.

APTEL ruled that the Commission had failed to exercise its regulatory powers under Section 86 of the Electricity Act, 2003, despite the clear existence of a regulatory gap. The Tribunal noted that SAEL’s mistake was inadvertent, went unnoticed by all parties for over six months, and had no adverse impact on other users. It cited Supreme Court judgments affirming the Commission’s authority to exercise regulatory discretion where statutes or codes are silent.

The Tribunal directed SLDC to allow correction of the data within one month and ordered UPPCL to pay the withheld dues within two months, along with carrying cost as per the Power Purchase Agreement.

Appeal No. 186 OF 2023 | Read the full order here.

APTEL upholds state’s power allocation role, dismisses FKCCI plea against BESCOM tariff

On 28 May 2025, the Appellate Tribunal for Electricity (APTEL) dismissed Appeal No. 362 of 2017 filed by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), challenging Karnataka Electricity Regulatory Commission’s (KERC) tariff order for FY 2017-18. The Tribunal upheld the legality of the Karnataka Government’s power allocation among distribution licensees and found no regulatory failure by KERC.

FKCCI had argued that the government exceeded its authority by reallocating high-cost power to BESCOM and MESCOM after the 2005 transfer scheme, which originally unbundled the Karnataka electricity sector. It alleged that this led to unjust tariffs for industrial consumers and that KERC abdicated its role under Section 86(1)(b) of the Electricity Act, 2003, by not independently regulating power procurement.

The Tribunal rejected these arguments. It ruled that under Section 131 of the Electricity Act, the state government retains the power to allocate power among electricity supply companies (ESCOMs), even after the transfer scheme. The judgment clarified that there is no statutory prohibition on such post-transfer allocations.

FKCCI also claimed that KERC failed to follow the National Tariff Policy and earlier APTEL orders by not calculating tariffs based on the actual cost of supply, and by approving tariffs for high-tension (HT) consumers that exceeded 20% of the average cost. The Tribunal noted that while such concerns may be valid for future policy guidance, they do not warrant reversal of the 2017-18 tariff order. It held that KERC had fulfilled its regulatory obligations by reviewing and approving the allocations made by the state.

APTEL also dismissed claims about improper fixed charge increases, stating that BESCOM had filed a petition requesting such changes, which were duly processed.

The appeal was dismissed in full, confirming the validity of the state’s allocation policies and the Commission’s tariff methodology.

Appeal No. 362 OF 2017 | Read the full order here.

APTEL dismisses industry appeals on IDC adjustment mechanism in Himachal Pradesh

The Appellate Tribunal for Electricity (APTEL) has dismissed three appeals filed by industrial consumers against the Himachal Pradesh Electricity Regulatory Commission’s (HPERC) 2016 order on the adjustment of Infrastructure Development Charges (IDC). In its judgment dated 28 May 2025, the Tribunal ruled that the order merely clarified a regulatory mechanism and did not impose new charges, thereby falling outside its jurisdiction to adjudicate.

The appellants—Ambuja Cement Ltd., SPS Steel Rolling Mills Ltd., and Asian Concretes and Cement (P) Ltd.—had challenged HPERC’s order dated 5 October 2016, which laid down the procedure for adjusting IDC paid by consumers while seeking Power Availability Certificates (PACs), as per Clause 3.2.2 of the 2009 Supply Code. Under this clause, consumers were required to pay Rs 1,000/kVA as an advance cost share toward infrastructure development, in addition to earnest money.

The appellants contended that HPERC’s mechanism lacked transparency and was contrary to earlier Recovery of Expenditure Regulations (2005 and 2012). They also argued that HPERC had disregarded the APTEL’s 2015 order, which had set aside an earlier clarification (dated 2 May 2011) issued without stakeholder consultation.

However, APTEL noted that HPERC had fully complied with its 2015 directive by conducting a public consultation—including notices to stakeholders and a hearing on 3 September 2016—before finalising the adjustment mechanism. The Tribunal emphasised that the 2016 order was issued under HPERC’s regulatory powers (Section 181 of the Electricity Act, 2003), not its adjudicatory powers, and hence could not be challenged before APTEL under Section 111.

Citing the Supreme Court’s decision in PTC India Ltd. v. CERC (2010), APTEL reiterated that the legality of regulatory provisions must be challenged through writ petitions under Article 226 of the Constitution, not via appellate proceedings.

As the appellants’ objections pertained to the validity of a regulation and not to an adjudicatory order, the Tribunal held the appeals non-maintainable and dismissed them.

Appeal No.287 OF 2017, Appeal No.396 OF 2017, Appeal No.397 OF 2017 | Read the full order here.

APTEL dismisses Biological E. appeal against HPERC order on IDC adjustment

The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by Biological E. Ltd. against the Himachal Pradesh Electricity Regulatory Commission’s (HPERC) 2016 order clarifying the adjustment mechanism for Infrastructure Development Charges (IDC). In its judgment dated 29 May 2025, APTEL ruled that the appeal was not maintainable, as it challenged a regulation issued under HPERC’s regulatory powers.

The case stems from HPERC’s clarification dated 5 October 2016, which outlined how Advanced Cost Share (ACS) payments made by consumers under Clause 3.2.2 of the Himachal Pradesh Electricity Supply Code, 2009, should be adjusted against final charges for electricity connections. Biological E. Ltd., a high-demand consumer in Sirmaur district, contended that there was no legal basis for collecting IDC or ACS under the 2005 Recovery of Expenditure Regulations or the Electricity Act, 2003.

The appellant argued that the clarification allowed unjustified recovery, lacked transparency, and favoured distribution licensees over consumers. HPERC, however, had issued the clarification only after following the directions of an earlier APTEL order from 2015, which required stakeholder consultation and public hearings. The Commission had undertaken this process and re-issued the clarification accordingly.

APTEL concluded that the 2016 clarification was regulatory in nature and did not impose new charges. It was issued to fill a procedural gap regarding how IDC was to be adjusted once supply applications were finalised. Citing the Supreme Court’s PTC India Ltd. v. CERC (2010), APTEL reiterated that it has no jurisdiction to rule on the validity of regulations framed under Section 181 of the Electricity Act. Such challenges must be raised through judicial review under Article 226 of the Constitution.

With this, APTEL affirmed that its jurisdiction does not extend to reviewing the legality of regulatory provisions and dismissed the appeal accordingly.

Appeal No.288 OF 2017  | Read the full order here.

CERC grants in-principle approval for ESP augmentation at DVC’s Mejia Units 1–3

The Central Electricity Regulatory Commission (CERC) has granted in-principle approval for Damodar Valley Corporation’s (DVC) proposal to undertake ESP augmentation works at Units 1–3 of Mejia Thermal Power Station (MTPS), West Bengal, to comply with revised emission norms under the Ministry of Environment, Forest and Climate Change (MoEF&CC) notification dated 07.12.2015.

DVC sought approval for a capital cost of Rs 307.69 crore towards augmentation of electrostatic precipitators (ESPs), aimed at reducing particulate matter emissions to within 100 mg/Nm³. The works were necessitated by persistent emissions exceeding permissible limits, as verified by multiple regulatory agencies including the West Bengal Pollution Control Board and NEERI. The Commission acknowledged this as a ‘Change in Law’ event.

While DVC submitted that the expected balance life of the units would be more than 10 years post-augmentation, Respondent DVPCA raised concerns about the cost-benefit justification and the plant’s potential decommissioning in the near future. However, CERC accepted DVC’s explanation that ESP augmentation was distinct from regular renovation and modernisation (R&M) and fell under additional capital expenditure due to environmental compliance obligations.

The Commission rejected DVC’s request for capital cost approval of ash handling and unrelated R&M works for Units 1 and 2, citing the earlier grant of Special Allowance for these units. It directed DVC to resubmit a revised petition delineating the cost of augmentation-specific activities and the phase-out plan of the units.

CERC has also permitted DVC to claim deemed availability for capacity charges during shutdowns related to ESP works and allowed it to approach the Commission later for other emission control systems if required.

Petition No. 371/MP/2022 | Read the full order here.

JSERC issues final tariff order for DVC: FY 2023-26

The Jharkhand State Electricity Regulatory Commission (JSERC) has issued its final order for Damodar Valley Corporation (DVC), covering the True-up for FY 2023-24, Annual Performance Review for FY 2024-25, and the Aggregate Revenue Requirement (ARR) and Tariff for FY 2025-26. The decision addresses several stakeholder concerns related to cost recovery, tariff structure, and power procurement.

A key point of contention was DVC’s claim for sinking fund contributions. The Association of DVC HT Consumers opposed the inclusion, arguing it constituted double recovery alongside depreciation. The JSERC upheld the Central Electricity Regulatory Commission’s (CERC) approval of the costs, noting the matter is pending adjudication by the Supreme Court.

The commission examined DVC’s energy charge rates (ECR), rejecting allegations of undue allocation of cheaper power to external beneficiaries. It approved a pooled ECR of Rs 3.477 per unit for FY 2023-24, with future adjustments tied to projected coal costs.

Transmission and distribution losses were capped at 3%, and any excess procurement costs were disallowed. While concerns were raised about unscheduled interchange (UI) charges, JSERC maintained they are essential for grid stability. It also revised procurement costs from the Green Day-Ahead Market (GDAM) and Renewable Energy Certificates (RECs) to reflect prevailing market prices.

Disputes over non-tariff income were settled in line with APTEL directives, limiting deductions to delayed payment surcharges linked to distribution. The final ARR for Jharkhand for FY 2025-26 was approved at Rs 6,807.70 crore, translating to a per-unit cost of Rs 6.61.

Case (Tariff) No.: 13 of 2024 | Read the full order here.

BERC approves 8th amendment to Bihar Electricity Supply Code 

The Bihar Electricity Regulatory Commission (BERC) has issued its final order in Case No. SMP-18/2024, approving the 8th Amendment to the Bihar Electricity Supply Code (BESC), 2007. The amendment, aligned with the Electricity (Rights of Consumers) Amendment Rules, 2024, seeks to expedite new connections and improve service transparency.

Under the revised Code, timelines for providing new electricity connections have been significantly reduced. Connections must now be provided within three days in metropolitan areas, seven days in other municipal areas, and fifteen days in rural areas. If infrastructure extension is required, the deadline is capped at ninety days.

A major revision to Clause 4.11 requires distribution companies (DISCOMs) to offer both online and offline application options. Acknowledgment numbers must be issued within 24 hours, and applicants must be able to track their status. For loads up to 10 kW, only proof of identity and address are required.

In a bid to enforce compliance, the amendment introduces a penalty of Rs 1,000 per day for delays in providing connections beyond the prescribed timelines. DISCOMs are also required to prominently display application procedures, required documents, and applicable charges on their websites and office premises.

Stakeholders, including DISCOMs and industry groups, raised concerns regarding offline applications, security deposits, and supervision charges. However, BERC upheld the proposed changes, dismissing suggestions that conflicted with the central rules.

SMP-18/2024 | Read the full order here.

GERC upholds uniform tariff regime for Gujarat state Discoms 

The Gujarat Electricity Regulatory Commission (GERC) has dismissed Petition No. 1929 of 2021 filed by the Utility Users’ Welfare Association and Shri K.K. Bajaj seeking separate tariffs for each of the state-owned distribution licensees—UGVCL, DGVCL, MGVCL, and PGVCL—based on their respective performance and cost structures.

The petitioners argued that a uniform tariff across all Discoms cross-subsidizes inefficient utilities and violates the principles of the Electricity Act, 2003, the Multi Year Tariff (MYT) framework, and the National Tariff Policy. They cited judicial precedents, including an APTEL judgment, which support cost-reflective and performance-based tariffs.

Respondents, including GUVNL and the four Discoms, contended that centralized power procurement and uniform tariffs have improved operational efficiency, ensured equitable access, and reduced overall power purchase costs. They emphasized that separate tariffs could lead to stranded capacity, inefficiencies, and higher consumer tariffs.

After reviewing all submissions, GERC held that the uniform tariff is justified under current operational and structural realities. The Commission noted that while the Electricity Act encourages cost-reflective tariffs, it does not mandate separate tariffs in all cases. It found the APTEL ruling cited by petitioners inapplicable to Gujarat’s state-run Discom context, which operates under a pooled procurement and allocation model.

GERC concluded that the current approach balances affordability, efficiency, and consumer interest. The petition was dismissed, though the Commission reserved the right to review the methodology if future sector conditions warrant.

Petition No. 1929 of 2021 | Read the full order here.

KERC introduces third amendment to consumer grievance regulations 

The Karnataka Electricity Regulatory Commission (KERC) has notified the Consumer Grievance Redressal Forum and Ombudsman (Third Amendment) Regulations, 2025, for accelerating resolution of electricity consumer complaints. The amendments, effective upon gazette notification, introduce a multi-tiered redressal mechanism with the establishment of corporate-level forums in addition to existing district-level Consumer Grievance Redressal Forums (CGRFs).

Distribution licensees are now required to set up corporate-level CGRFs chaired by a Chief Engineer, with members including a prosumer representative and an expert nominated by KERC. If grievances remain unresolved at the district level within 60 days, they will auto-escalate digitally to the corporate CGRF, which must dispose of them within 30 days.

The amendment formally defines “prosumers”—consumers who also feed electricity into the grid—and mandates their representation on corporate CGRFs for a term of three years. These changes aim to reflect the growing importance of decentralized and renewable energy participants in Karnataka’s power sector.

Relief and compensation for consumers will now align with the 2022 Standards of Performance Regulations, replacing the older 2004 benchmarks. Non-official members and prosumer representatives will receive honorariums and travel allowances equivalent to those of Class I government officers.

Consumers dissatisfied with corporate CGRF decisions can file appeals with the Ombudsman within 30 days, with scope for condoning delays under valid circumstances.

KERC stated that the reforms are designed to “mitigate grievances expeditiously” and ensure responsiveness to evolving consumer needs, particularly in the context of Karnataka’s expanding renewable energy landscape. The changes were finalized following public consultations and in accordance with Section 42 of the Electricity Act, 2003.

KERC/DDD/CGRF/1254/2025-26/ 209 | Read the full order here.

WBERC disposes IPCL petition on O&M norms after unconditional withdrawal

The West Bengal Electricity Regulatory Commission (WBERC) has closed a petition filed by India Power Corporation Limited (IPCL) seeking clarification on norms for operational expenditures, following an unconditional withdrawal request from the company. The order, issued on May 26, 2025, bars IPCL from re-filing on the same issues, reinforcing finality in regulatory matters.

Filed in July 2021 (Case No. OA-375/21-22), the petition had sought review of WBERC’s approach to determining operation and maintenance (O&M) expenses, clarification on how contractual employee costs are treated, and a reassessment of norms for stores and spares consumption. However, in July 2023, IPCL abruptly sought to withdraw the case without providing any justification.

The commission accepted the withdrawal and dismissed the case without adjudication, but took a firm stance by preventing the utility from raising the same issues in a new petition. 

Petition No:  CASE NO: OA-375/21-22 | Read the full order here.

For more regulatory updates, read the latest orders covered on Power Peak Digest: Energy Regulatory Updates – Power Peak Digest 

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