{"id":277965,"date":"2022-11-24T15:00:51","date_gmt":"2022-11-24T09:30:51","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=277965"},"modified":"2022-11-24T15:00:51","modified_gmt":"2022-11-24T09:30:51","slug":"state-regulatory-commissions-to-frame-regulations-for-determination-of-electricity-tariff-within-3-months-supreme-court-electricity-act-2003-section63-interpretation-legal-research-updates-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/11\/24\/state-regulatory-commissions-to-frame-regulations-for-determination-of-electricity-tariff-within-3-months-supreme-court-electricity-act-2003-section63-interpretation-legal-research-updates-news\/","title":{"rendered":"All State Regulatory Commissions must frame Regulations for determination of Electricity tariff within 3 months: Supreme Court\u00a0"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: The 3-judge bench of <strong>Dr DY Chandrachud, CJI* <\/strong>and AS Bopanna and JB Pardiwala, JJ has directed all State Regulatory Commissions to frame Regulations under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001553490\">181<\/a> of <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002782344\">Electricity Act, 2003<\/a> on the terms and conditions for determination of tariff within three months after holding that the provisions of the Act do not prescribe one dominant method to determine tariff as it seeks to distance the State Governments from the determination and regulation of tariff, placing such power completely within the ambit of the Appropriate Commissions.<\/p>\n<p style=\"text-align: justify;\">The Court observed that though the Government, both at the Centre and in the States, have framed statutory policies and guidelines regulating the electricity sector, the Regulatory Commissions have not framed the necessary regulations to put into effect the principles prescribed under the Act.<\/p>\n<p style=\"text-align: justify;\">The Court directed that,<\/p>\n<ul style=\"text-align: justify;\">\n<li>While framing these guidelines on determination of tariff, the Appropriate Commission shall be guided by the principles prescribed in Section 61, which also includes the NEP and NTP, aiming to effectuate a balance that would create a sustainable model of electricity regulation in the States.<\/li>\n<li>The Regulatory Commission shall curate to the specific needs of the State while framing these regulations. Further, the regulations framed must be in consonance with the objective of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002782344\">Electricity Act, 2003<\/a>, which is to enhance the investment of private stakeholders in the electricity regulatory sector so as to create a sustainable and effective system of tariff determination that is cost efficient so that such benefits percolate to the end consumers.<\/li>\n<li>Where the Appropriate Commission(s) has already framed regulations, they shall be amended to include provisions on the criteria for choosing the modalities to determine the tariff, in case they have not been already included.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">Explaining the scheme of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002782344\">Electricity Act, 2003<\/a>, the Court observed that Sections 62 and 63 stipulate the modalities of tariff determination. While Section 62 bestows the Commission with wide discretion to determine tariff, Section 63 seeks to curtail this discretion where a bidding process for tariff determination has already been conducted<em><u>. Section 63 contemplates that in such situations where the tariff has been determined through the bidding process, the Commission cannot by falling back on the discretion provided under Section 62 negate the tariff determined through bidding. This interpretation of Section 63 is fortified by the use of the phrase \u2018such\u2019 in Section 63 &#8211; the Commission is bound to \u2018adopt\u2019 \u2018such\u2019 tariff determined through bidding.<\/u><\/em><\/p>\n<p style=\"text-align: justify;\">Explaining the features of Section 63, the Court observed:<\/p>\n<ul style=\"text-align: justify;\">\n<li>Section 63 begins with a <em>non-obstante<\/em> clause. The <em>non-obstante<\/em> provision overrides Section 62 alone and not all the provisions of the Act;<\/li>\n<li>as opposed to Section 62 where the Commission is granted the power to determine the tariff, under the Section 63 route, the bidding process determines the tariff;<\/li>\n<li>the Commission is mandated to adopt such tariff that is determined by the bidding process;<\/li>\n<li>the Commission has the discretion to not adopt the tariff determined through the bidding process only if the twin conditions as mentioned in the provision are not fulfilled; and<\/li>\n<li>the twin conditions are that <em>(a)<\/em> the bidding process must have been transparent; <em>(b)<\/em> the bidding process must have complied with the guidelines issued by the Central Government.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">The Court stressed that <em><u>the non-obstante clause in Section 63 cannot be interpreted to mean that Section 63 would take precedence over Section 62 at the stage of choosing the modality to determine tariff.<\/u><\/em> The criteria or guidelines for the determination of the modality of tariff determination ought to be notified by the Appropriate State Commission either through regulations under Section 181 of the Act or guidelines under Section 61 of the Act.<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">\u201cThere is nothing in Sections 62 or 63 that could lead us to interpret that Section 63 is the dominant route for determination of tariff. Both the provisions provide alternative modalities through which tariff can be determined.\u201d<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">[TATA Power Company Limited Transmission v. Maharashtra Electricity Regulatory Commission, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/kG4CvOro\">2022 SCC OnLine SC 1615<\/a>, decided on 23.11.2022]<\/p>\n<hr \/>\n<h4 style=\"text-align: justify;\">*Judgment by: CJI Dr DY Chandrachud<\/h4>\n<hr \/>\n<p style=\"text-align: justify;\">For appellants: Sr Adv Shyam Divan<\/p>\n<p style=\"text-align: justify;\">For respondent: Sr Advs Dr Abhishek Manu Singhvi and Vikas Singh<\/p>\n<p style=\"text-align: justify;\">\n","protected":false},"excerpt":{"rendered":"<p>The Electricity Act, 2003 does not prescribe one dominant method to determine tariff as it seeks to distance the State Governments from the determination and regulation of tariff, placing such power completely within the ambit of the Appropriate Commissions. <\/p>\n","protected":false},"author":121,"featured_media":277969,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[53158,34660,53159,44724,53160,53161,53162],"class_list":["post-277965","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-determination-of-tariff","tag-electricity-act-2003","tag-electricity-tariff","tag-interpretation-of-statutes","tag-method-for-determination-of-tariff","tag-section-63-of-electricity-act","tag-state-regulatory-commissions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>All State Regulatory Commissions must frame Regulations for determination of Electricity tariff within 3 months: Supreme Court\u00a0 | 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power sector; Directs States to clear DISCOMs dues within 4 years","author":"Apoorva","date":"August 9, 2025","format":false,"excerpt":"\u201cRegulatory failure\u2019 occurs due to ineffective functioning of the Regulatory Commissions, excessive governmental interference, or \u2018regulatory capture\u2019.\u201d","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Supreme Court DISCOM dues","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/08\/Supreme-Court-DISCOM-dues.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/08\/Supreme-Court-DISCOM-dues.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/08\/Supreme-Court-DISCOM-dues.webp?resize=525%2C300&ssl=1 1.5x, 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Desai, J. (Chairperson) and I. J. Kapoor, Technical Member, inter alia held that the State Commission overstepped its jurisdiction while limiting the liability of PSPCL towards the appellant and exceeded the scope of the order\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/08\/Electricity1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/08\/Electricity1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/08\/Electricity1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/08\/Electricity1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/08\/Electricity1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":6636,"url":"https:\/\/www.scconline.com\/blog\/post\/2015\/05\/28\/delhi-electricity-regulatory-commission-directed-to-disclose-information-on-tariff-issues-in-simple-and-easy-language\/","url_meta":{"origin":277965,"position":3},"title":"Delhi Electricity Regulatory Commission directed to disclose information on tariff issues in simple and easy language","author":"Sucheta","date":"May 28, 2015","format":false,"excerpt":"Central Information Commission (CIC): CIC has directed Delhi Electricity Regulatory Commission (DERC) to disclose public information on distribution companies\u2019 (DISCOMs) tariff petitions in simple and easy language with analysis and explanations so that a common man may understand and respond, before inviting their objections and views. 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Iyer and I.S. Jha (Members) disposed of a power generating company\u2019s petition for determination of tariff as infructuous, due to change in anticipated date of commercial operation (COD). Petitioner company had entered into power purchase agreements\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/02\/Central-Electricity-Regulatory-Commission-%E2%80%93-CERC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/02\/Central-Electricity-Regulatory-Commission-%E2%80%93-CERC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/02\/Central-Electricity-Regulatory-Commission-%E2%80%93-CERC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/02\/Central-Electricity-Regulatory-Commission-%E2%80%93-CERC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/02\/Central-Electricity-Regulatory-Commission-%E2%80%93-CERC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":296446,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/07\/10\/state-commissions-cannot-decide-trade-margins-ists-power-projects-legal-news\/","url_meta":{"origin":277965,"position":5},"title":"State Commissions cannot modify tariff adopted by Central Commission and adopt trade margin for ISTS power projects: APTEL","author":"Apoorva","date":"July 10, 2023","format":false,"excerpt":"APTEL said that in accordance with the guidelines and the CERC Regulations, the Appropriate Commission, the trading margin shall be decided mutually by the SECI, the trading licensee and the WPPs and in turn by the distribution licensees.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"appellate tribunal for electricity","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/07\/appellate-tribunal-for-electricity.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/07\/appellate-tribunal-for-electricity.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/07\/appellate-tribunal-for-electricity.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/07\/appellate-tribunal-for-electricity.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/277965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/121"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=277965"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/277965\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/277969"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=277965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=277965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=277965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}