Author: PPD Team Date: 08/04/2025
The Supreme Court has upheld the 2016 regulations introduced by the Rajasthan Electricity Regulatory Commission (RERC) to govern open access to electricity for industrial consumers.
A bench of Justices Vikram Nath and Prasanna B. Varale dismissed appeals by several industrial companies, including Ramayana Ispat Pvt Ltd, challenging Rajasthan High Court decisions that had upheld the RERC rules. The decisions came from both the Jodhpur and Jaipur benches of the High Court.
The 2016 regulations introduced key changes for open access consumers. One major provision was a cap on simultaneous use of open access power and contracted demand from distribution licensees. If a company procured power through open access, its contracted demand from the distribution company would be reduced accordingly. Penalties were also introduced for drawing more or less power than scheduled.
Industrial consumers, including Hindustan Zinc Limited, argued that the new rules restricted flexibility and were unfair to users of captive power plants (CPPs). They said the changes ran contrary to the Electricity Act, 2003 and harmed large power users that rely on a mix of open access and captive generation.
Earlier, under the 2004 regulations, industries had more flexibility in sourcing power. The 2016 version brought in stricter conditions—such as advance scheduling and penalty clauses—which, according to the petitioners, placed them at a disadvantage.
However, the High Court had already found that the new rules were necessary for maintaining grid stability and fair distribution of power. The Supreme Court has now confirmed that view.
In an 83-page ruling, Justice Nath wrote that RERC has legal authority under the Electricity Act, 2003 to regulate open access. This includes setting conditions that ensure fair competition, scheduling discipline, and reliability in power supply.
The court noted that while the rules might inconvenience some captive power users, they do not violate any constitutional or statutory rights. Instead, the changes aim to keep the power grid stable and treat all consumers equally.
The judgment also clarified that the RERC can regulate inter-state open access to some extent, as long as it serves the broader public interest and protects the electricity market from manipulation.
It concluded that the RERC’s 2016 regulations were in line with the objectives of the Electricity Act, 2003, and were designed to promote equitable treatment of all players while securing the integrity of the power grid.