Supreme Court allows Himachal Pradesh to seek 18% free power from JSW Hydro

The Supreme Court has ruled in favour of the Himachal Pradesh government in its dispute with JSW Hydro Energy over free power supply, allowing the state to demand 18% of generated electricity without charge, reported CNBC. 

This overturns a previous Himachal Pradesh High Court order that had limited the free power share to 13%, based on Central Electricity Regulatory Commission (CERC) tariff regulations.

JSW Hydro Energy, a subsidiary of JSW Neo Energy and ultimately of JSW Energy, operates the Karcham Wangtoo and Baspa II hydroelectric projects in the state, with a combined capacity of 1,391 MW. In 2023, Himachal Pradesh issued a notice directing the company to begin supplying 18% of power free of cost.

JSW Hydro challenged the directive, citing a 2022 CERC decision that capped free energy supply at 13%. The company argued that this regulatory cap should take precedence over its earlier Power Supply Agreement (PSA).

While the High Court initially ruled in favour of JSW Hydro, the Supreme Court has now clarified that CERC regulations do not prevent the state from seeking a higher free power share. The court further held that the PSA remains valid and is not overridden by the tariff regulations.

This decision allows Himachal Pradesh to enforce its earlier notice and seek 18% free power from the company.