Energy ESG Greeen Power Green Power Legal Alerts Power Power Sector

Energy Law Brief – January and February 2024

We extend a warm welcome as we reconnect with you through our newsletter for the months of January and February 2024.

Greetings to you and your loved ones!

We extend a warm welcome as we reconnect with you through our newsletter for the months of January and February 2024. In our continuous commitment to keep you well-informed about the ever-evolving legal landscape of the energy sector in India, we have curated the latest updates which includes regulatory and policy developments, and noteworthy judgements.


  • Karnataka’s Plan to Facilitate Peer-to-Peer Solar Energy Trading Through Blockchain

The Karnataka Electricity Regulatory Commission (KERC) has introduced a draft proposal for peer-to-peer solar energy trading facilitated by blockchain technology, allowing consumers to become prosumers by selling surplus power directly. The draft regulations, titled Karnataka Electricity Regulatory Commission (Implementation of Peer-to-Peer Solar Energy Transaction through blockchain-based platform) Regulations 2024, require participants to register with Distribution Companies (DISCOMs) on a first-come, first-serve basis. Trading, whether preferential or dynamic, involves mutual agreements on pricing and scheduling. In instances where excess energy isn’t available in the peer-to-peer network, DISCOMs step in to meet consumer needs. To participate, rooftop solar projects must meet metering standards and have a capacity between 1 kW and 2 MW. The framework outlines responsibilities for service providers, including maintaining a blockchain platform and ensuring transaction settlement. Billing and settlement mechanisms are established, with penalties for non-compliance. KERC sought feedback from stakeholders before potential implementation, retaining the right to modify the framework as needed. Additionally, similar initiatives have been proposed in other states, indicating a growing trend towards decentralized energy trading.

  • Goods and Services Tax (GST) Rules to Allow Input Tax Credit for Rooftop Solar Systems

The Gujarat Authority for Advanced Ruling recently ruled that rooftop solar power systems qualify as plant and machinery, making them eligible for input tax credit under the GST Act. The decision was based on the reasoning that these systems, affixed to building roofs with nuts and bolts, are not considered immovable property and thus can be classified as plant and machinery. This ruling allows businesses to offset GST liabilities on supplies using the solar power generated. The ruling came in response to a petition from Unique Welding Products Limited, which installed a 440 kW rooftop solar system for captive power generation.

  • Prime Minister Unveils New Program for Rooftop Solar Installation in 10 Million Households

The Indian Prime Minister Shri Narendra Modi has announced a new initiative under the Pradhan Mantri Suryodaya Yojana, aimed at installing rooftop solar systems for 10 million households across India. This initiative aims to reduce power costs for low and middle-income households and enhance India’s energy self-sufficiency. In January 2024, REC Limited was appointed as the main executor for this rooftop solar initiative by the Ministry of New and Renewable Energy (MNRE). Additionally, MNRE has issued directives to simplify implementation procedures and updated benchmarks for central financial assistance in Phase-II of the rooftop solar program to accelerate the adoption of grid-connected rooftop solar systems.

  • Ministry of New and Renewable Energy Introduces Updated Guidelines for Implementing PM-KUSUM Program

MNRE has issued amended guidelines for the implementation of the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) program, aiming to empower farmers and promote renewable energy adoption. The guidelines outline three components: Component A focuses on installing decentralized ground-mounted grid-connected solar power plants on farmers’ land, facilitating leasing arrangements with DISCOMs and ensuring power procurement at a predefined tariff. Component B aims to assist individual farmers in off-grid areas to install standalone solar agriculture pumps, with financial aid from central and state governments. Component C centers on solarizing grid-connected agricultural pumps, offering options for individual pump solarization and feeder-level solarization to enhance energy efficiency and income generation for farmers. The guidelines emphasize collaboration among state implementing agencies, discoms, and farmers to achieve the ambitious goal of integrating 34,800 MW of solar capacity by March 2026, supported by a central financial assistance of Rs 344.22 billion.

  • Government Introduces Rewards for Generating 200,000 MT of Green Hydrogen

MNRE has unveiled a framework aiming to facilitate the annual production of 200,000 metric tonnes (MT) of green hydrogen, with provisions for additional capacity in subsequent phases if deemed necessary. This initiative offers incentives over a three-year period to encourage the production and delivery of cost-effective green hydrogen to refineries through a competitive selection process under Mode 2B of the strategic interventions for green hydrogen transition (SIGHT) initiative, supported by a comprehensive budget of Rs 130.5 billion. Incentives start at Rs. 50 per kg in the first year, reducing to Rs. 40 per kg in the second year, and further to Rs. 30 per kg in the third year. Eligible bidders must adhere to national green hydrogen standards and comply with guidelines set by the Ministry of Petroleum and Natural Gas (MoPNG), with oil and gas companies acting as implementing agencies alongside the Centre for High Technology (CHT). Bidders are required to meet a minimum net worth criterion and may be single entities, joint ventures, or consortia, with oversight provided by a committee chaired by MoPNG secretary to monitor progress and performance.

  • Government Introduces Incentives for Producing 550,000 Metric Tonnes of Green Ammonia

MNRE has introduced an incentive structure for the production and distribution of green ammonia as part of the strategic interventions for green hydrogen transition (SIGHT) initiative, specifically within mode 2A. These incentives, spanning three years, aim to facilitate the generation and delivery of green ammonia at competitive rates. With a budget of Rs. 130.5 billion allocated for the entire green hydrogen production incentive scheme, the incentives decrease annually from Rs. 8.82 per kg in the first year to Rs. 5.30 per kg in the third year. Responsibilities for implementing the incentive scheme fall to the Solar Energy Corporation of India (SECI), including application evaluation, award issuance, and incentive claim verification. SECI will also monitor and report on program progress quarterly. Tranche I of mode 2A allows bidding for 550,000 metric tonnes per annum of green ammonia, with SECI determining additional capacity if needed for subsequent tranches. Eligibility for incentives requires compliance with national green hydrogen standards, and a committee overseen by MNRE and the Department of Fertilisers will monitor progress and performance.

  • Ministry of New and Renewable Energy Sanctions Rs 5.15 Billion Solar Initiative for Vulnerable Tribal Communities

The President of India has greenlit a new solar power initiative proposed by MNRE. With a budget of Rs 5.15 billion, this initiative is tailored for habitations and villages inhabited by Particularly Vulnerable Tribal Groups (PVTG) as part of the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM JANMAN). The aim is to provide electricity to 100,000 households within PVTG regions lacking grid-based electricity supply, deemed not feasible technologically or economically. This will be achieved through the installation of 0.3 kW off-grid solar power systems, with each household eligible for financial aid up to Rs. 50,000 or the actual system cost, whichever is lower.

Moreover, the initiative entails the provision of solar lighting in 1,500 multi-purpose centers situated in PVTG areas with limited access to grid-based electricity. The government has earmarked Rs. 100,000 per multi-purpose center for this purpose, with a total budget allocation of Rs. 150 million. The programme is scheduled to span the fiscal years 2023-24 to 2025-26 and will cover PVTG areas identified by the Ministry of Tribal Affairs across various states. The funding will be drawn from MNRE’s development action plan for scheduled tribes, with disbursements planned over three years, including Rs. 200 million in 2023-24, Rs. 2.55 billion in 2024-25, and Rs. 2.4 billion in 2025-26, under a dedicated budgetary allocation for PM JANMAN.

  • Central Electricity Authority (CEA) issues draft of National Electricity Plan (Volume-II: Transmission)

CEA has released a draft of the National Electricity Plan (Volume-II: Transmission), highlighting significant transmission targets and renewable energy integration strategies. The draft outlines achievements from 2017 to 2022, including the addition of 110,281 circuit kilometers (ckm) of transmission lines and 383,690 MVA of transformation capacity, with impressive attainment rates. Looking ahead to March 2027, as renewable energy capacity continues to grow, further transmission infrastructure is being planned, considering wind, solar, and battery energy storage systems. By March 2032, transmission systems are set to accommodate capacities from a variety of sources, including wind, solar, hydro, and nuclear. The plan also explores various technological advancements like hybrid substations and voltage-sourced converters to bolster the power system’s development. CEA has invited feedback on the draft, encouraging inputs until March 26, 2024.

  • Central Electricity Authority releases draft amendments to Regulations for Meter Installation and Operation in 2024

CEA has released a draft Central Electricity Authority (Installation and Operation of Meters) (Amendment) Regulations, 2024, stipulating several provisions regarding meter installations and operations. Under the proposed regulations, consumers in areas with communication networks must be equipped with smart meters operating in prepayment mode and complying with relevant IS standards within specified timelines set by the central government. Additionally, consumer connections exceeding current carrying capacity limits specified in relevant IS standards are mandated to have meters with automatic remote meter reading or smart meters. In regions lacking communication networks, State Electricity Regulatory Commissions are permitted to install prepayment meters adhering to relevant IS standards. Comments and suggestions on the draft were invited by CEA until February 26, 2024.

  • Ministry of Power (MoP) Issues Notification for Electricity (Amendment) Rules of 2024

MoP has issued the Electricity (Amendment) Rules, 2024, introducing significant changes to the existing regulatory framework. The amendments involve resequencing existing rules and adding two new ones, Rule 21 and Rule 22. Rule 21 exempts generating companies, captive power plant operators, energy storage system operators, and consumers with substantial loads from obtaining a license under the Electricity Act, 2003 for establishing a dedicated transmission line to connect to the grid, provided they comply with relevant regulations and standards. Rule 22 focuses on open access charges, including wheeling charges and charges for using State Transmission Utility (STU) networks. It stipulates that charges for STU network usage by consumers with short-term open access or temporary general network access should not exceed 110 percent of the charges for long-term users or those with general network access.

  • Central Electricity Regulatory Commission (CERC) issues draft Regulations for regulating Terms and Conditions of Tariff

CERC has released a draft of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations for 2024. According to the draft regulations, tariffs for generating stations and emission control systems, if applicable, can be established for the entire station or unit, while transmission system tariffs extend to the entire system or its components. Units or systems operational before April 1, 2024, are required to submit a consolidated petition for tariff determination from April 1, 2024, to March 31, 2029. Tariffs for communication systems linked with transmission, operational before April 1, 2014, must adhere to the methodology approved by the commission prior to that date. Additionally, generating companies are mandated to apply for supplementary tariff determination for emission control systems in coal or lignite-based thermal stations within 90 days of their commencement, following the prescribed regulations.

  • Jharkhand Implements Framework for Solar Group and Virtual Net Metering

The Jharkhand State Electricity Regulatory Commission (JSERC) has introduced regulations for group net metering and virtual net metering, aiming to support the objectives set forth in the Jharkhand State Solar Policy 2022. These regulations, known as the Jharkhand State Electricity Regulatory Commission (Group Net Metering and Virtual Net Metering) Regulations, 2024, will come into effect upon publication in the Jharkhand State Government Gazette. They are applicable to all eligible consumers, excluding those with outstanding arrears with the distribution licensee. The regulations stipulate procedures for technical feasibility analysis, connection agreements, metering arrangements, and billing and energy accounting, whether under group net metering or virtual net metering. Additionally, provisions for inspection, dispute resolution, applicability of other charges, renewable purchase obligation, eligibility for REC mechanism, and the power to remove difficulties or amend regulations have been outlined. These measures are part of Jharkhand’s efforts to promote renewable energy generation, aligned with its target of achieving 4 GW of solar capacity by 2026 as per the Jharkhand Solar Policy 2022.

  • Tamil Nadu Regulatory Commission Introduces Guidelines for Wind and Solar Integration

The Tamil Nadu Electricity Regulatory Commission (TNERC) has introduced the Tamil Nadu Electricity Regulatory Commission (Forecasting, Scheduling and Deviation Settlement and related matters for Wind and Solar Generation) Regulations, 2024, set to take effect from April 1, 2024. These regulations aim to facilitate the integration of wind and solar energy into Tamil Nadu’s grid, ensuring stability and security in line with state grid code and relevant legislation. The regulations mandate the state load dispatch center (SLDC) to consider forecasts of wind and solar generation for various operational timeframes, leveraging flexibility in conventional generating units and inter-grid tie-lines to maximize renewable energy incorporation while maintaining grid security. These regulations apply to all wind and solar energy generators in Tamil Nadu, including hybrid systems, and cover projects connected to both intra-state transmission and distribution systems. Key provisions include the appointment of Qualified Coordinating Agencies (QCAs) for forecasting and scheduling, metering requirements, deviation settlement mechanisms, and procedures for inter and intra-state transactions. Additionally, the regulations address issues related to gaming, dispute resolution, and payment mechanisms for deviation charges. TNERC’s initiative aligns with efforts to promote renewable energy adoption and grid stability, contributing to Tamil Nadu’s transition towards sustainable energy practices.

  • Jharkhand Elucidates Requirements for Accessing Green Energy through Open Access

The JSERC has introduced the Jharkhand State Electricity Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2024, aiming to promote renewable energy generation. These regulations categorize consumers based on the duration of their use of the intra-state transmission and distribution system: long-term, medium-term, and short-term open access. Eligibility criteria allow renewable energy companies with valid power purchase agreements (PPAs) and captive generating plants to access green energy open access, subject to certain restrictions. Applications for open access must be submitted through the central portal and processed by the State Nodal Agency (SNA). Various procedures and charges, including transmission, wheeling, and banking charges, are outlined, with exemptions for certain categories of solar projects. Additionally, rules regarding energy banking and withdrawal are specified, aiming to facilitate efficient utilization of renewable energy resources. These regulations align with Jharkhand’s ambitious solar policy, aiming to deploy 4 GW of solar capacity in the state by 2026.

  • Penalties Lifted for Commencement Delays in Renewable Project Power Supply

MoP has updated the guidelines for tariff-based competitive bidding in the procurement of firm and dispatchable renewable energy, including solar, wind, hybrid, and energy storage projects. The amendments remove penalties previously imposed for delays in commencing power supply beyond the scheduled date. Previously, generators faced penalties, including encashment of guarantees and reduction of contracted capacity, for delays up to six months and risked project termination for longer delays. Additionally, developers could face debarring from future bids for repeated delays. The revised guidelines allow flexibility in the scheduled commercial operation date (SCOD), potentially leading to project delays. Last year, MNRE proposed blacklisting developers failing to meet project deadlines, indicating stricter measures to ensure timely project completion. Delays in solar projects during the second quarter of 2023 contributed to a significant decline in investments.

  • Central Electricity Regulatory Commission Initiates Market Coupling Shadow Pilot Across Power Exchanges

CERC has initiated a shadow pilot project to explore power system optimization and cost reduction through market coupling across various segments of three energy exchanges. This project aims to couple Real-Time Market (RTM) segments, Security Constrained Economic Dispatch (SCED), and Day-Ahead Market (DAM) segments of the exchanges. Market Coupling, as defined, seeks to match bids from all exchanges to determine a uniform market clearing price, enhancing transmission infrastructure use and economic surplus. Despite simulation results showing limited gains from coupling in DAM and RTM segments, CERC believes exploring alternatives is crucial for increasing market participation and supply availability. Additionally, coupling RTM with SCED is proposed to optimize the power system, potentially reducing price volatility and enhancing reliability. Grid Controller of India Limited  has been appointed as the implementing agency to conduct the shadow pilot, analyze findings, and propose a regulatory framework based on operational experience. CERC aims to enhance market depth and optimize power systems through these initiatives, with plans to explore coupling of DAM with Security Constrained Unit Commitment (SCUC) to secure system reserves.

  • Draft Guidelines on Wind and Solar Power Curtailment Management Released by Tamil Nadu

TNERC has introduced comprehensive draft guidelines to address the curtailment of wind and solar power generation within the state, responding to the rising renewable energy capacity. These guidelines aim to strike a balance between ensuring grid stability and maximizing the utilization of clean energy sources. The draft guidelines categorize curtailment situations into two main categories: grid security and operational issues. Grid security focuses on maintaining critical parameters such as frequency and transmission line loading within acceptable limits, with curtailment being considered if these parameters deteriorate, posing risks to grid safety. Operationally, curtailment may arise from factors like transmission congestion or exceeding volume limits set by central regulators. The guidelines offer detailed protocols for managing various curtailment scenarios, including high grid frequency and congestion on specific transmission lines. Solar and wind generators affected by curtailment, not related to grid security, will receive compensation based on factors like capacity utilization factor (CUF) and PPA tariffs, with distribution companies covering the costs. Compliance responsibilities, communication protocols, and the roles of relevant stakeholders in curtailment management are outlined, with feedback on the draft guidelines invited until February 29, 2024.

  • Government Unveils Guidelines for Pilot Projects Harnessing Green Hydrogen in Transportation

The central government has introduced guidelines for pilot projects under the National Green Hydrogen Mission, focusing on integrating green hydrogen into the transport sector. A steering committee, led by the secretaries of the Ministry of Road Transport and Highways (MoRTH) and MNRE, will oversee project implementation. The initiative consists of two components: Component A promotes technology advancement for using green hydrogen in buses, trucks, and four-wheelers, while Component B supports infrastructure development like hydrogen refueling stations. These projects aim to explore innovative solutions to reduce carbon emissions in transportation and have a budget of Rs 4.96 billion until 2025-26.

Through these pilot projects, operational challenges and technological gaps will be identified, providing crucial insights for future commercialization of green hydrogen in transportation. The initiative is expected to establish necessary infrastructure and foster a green hydrogen ecosystem, with an anticipation of increased adoption as production costs decrease. Intercity bus and truck operators stand to benefit from lessons learned, supported by financial assistance to bridge viability gaps in initial capital costs. However, expenses related to hydrogen production and land are not covered, and financial assistance will be disbursed in three phases based on project milestones.

  • Prime Minister Introduces PM Surya Ghar Muft Bijli Yojana

The Indian Prime Minister Shri Narendra Modi has launched the PM Surya Ghar Muft Bijli Yojana, a program designed to offer free electricity to households through residential rooftop solar installations. With an investment surpassing Rs. 750 billion, the initiative aims to provide power to 10 million households by granting up to 300 units of electricity monthly at no cost. Significant subsidies will be directly transferred to individuals’ bank accounts, accompanied by highly concessional bank loans to alleviate financial burdens. A National Online Portal will be established for streamlined stakeholder integration.

To incentivize grassroots adoption, urban local bodies and panchayats will receive incentives for promoting rooftop solar installations. The program is expected to enhance income, decrease electricity expenses, and create employment opportunities. Subsidies of Rs. 30,000 per kW for up to 2 kW and an additional Rs. 18,000 per kW for capacities above 2 kW and up to 3 kW will be provided, with a maximum subsidy of Rs. 78,000 for systems exceeding 3 kW. In January 2024, the Prime Minister introduced a new initiative under the Pradhan Mantri Suryodaya Yojana, aiming to deploy rooftop solar systems for 10 million households nationwide, with REC Limited designated as the main executor by MNRE.

  • Union Budget 2024: Proposals Unveiled for Rooftop Solar, Offshore Wind, EV Infrastructure, and Biogas Integration

During the 2024 interim budget presentation, the Union Finance Minister unveiled significant initiatives aimed at promoting sustainable energy and electric mobility in India. One key highlight was the plan to solarize 10 million households through rooftop solar installations, building upon the Pradhan Mantri Suryodaya Yojana initiative. This effort aims to reduce electricity costs for low and middle-income families while enhancing India’s energy self-sufficiency. Additionally, viability gap funding was approved for offshore wind projects totalling 1,000 MW, with the aim of accelerating the growth of offshore wind energy.

Furthermore, the government is set to strengthen the electric vehicle ecosystem by supporting manufacturing and charging infrastructure. Focus will be on encouraging the adoption of electric buses in public transportation systems, thereby improving urban mobility while reducing emissions. Another significant move involves mandatory blending of compressed biogas with natural gas for transportation, aligning with the government’s commitment to cleaner fuel alternatives. Additionally, the introduction of the Biomanufacturing and Bio Foundry program aims to develop eco-friendly materials. Despite increases in allocations for on-grid solar power and the National Green Hydrogen Mission, some programs, such as on-grid wind power and electric vehicle initiatives, saw decreased budget estimates, indicating a shift in priorities within sustainable energy sectors.

  • Central Electricity Authority Releases Draft Distribution Perspective Plan 2030

CEA, in conjunction with distribution utilities, has devised the Distribution Perspective Plan (DPP) extending until the fiscal year 2029-30. In compliance with the Electricity Act, 2003, which mandates CEA to devise the National Electricity Plan every five years, and as stipulated in Section 73 (a) of the Electricity Act, 2003 which tasks CEA with formulating short-term and perspective plans for electricity system development, the DPP-2030 has been crafted. Drawing upon data furnished by distribution utilities, the draft DPP delineates infrastructure blueprints encompassing substations, feeders, capacitor banks, distribution transformers, and low-tension feeders, while integrating optimal practices adopted by discoms to ensure efficient distribution system management. The primary focus lies in guaranteeing reliable and superior power supply to consumers, thereby augmenting overall consumer contentment. CEA has invited feedback and recommendations on the draft plan, with a deadline set for April 1, 2024.

  • Central Electricity Authority Releases Draft Revised Guidelines for Retirement and Up-rating/De-rating of Generating Units

CEA has released draft revised guidelines concerning the retirement and up-rating/de-rating of generating units, applicable to conventional sources of electricity generation such as coal, lignite, diesel, gas-based power plants, and large hydroelectric plants (above 25 MW). The guidelines outline a structured process for retiring generating units, requiring generating companies or utilities to submit formal requests accompanied by certified copies of Board of Directors’ resolutions to CEA. A standing committee evaluates these proposals in alignment with existing policies and regulations set by the central government. Approved retirements are updated in CEA’s installed capacity database, contingent upon the Chairperson’s subsequent approval. The proposal review process is expected to conclude within one month, provided all necessary data is promptly supplied. These guidelines aim to ensure transparency and systematic handling of generating unit retirements.

  • Central Electricity Regulatory Commission announces draft regulations for tariff determination from renewable energy sources in 2024

CERC has released draft Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2024. According to the draft regulations, CERC will annually determine the generic tariff for various renewable energy projects, including small hydro, biomass, co-generation, and waste-based power projects. These regulations will be applicable for determining tariffs for grid-connected generating stations or units based on renewable energy sources commissioned during the control period. The regulations are set to come into effect on April 1, 2024, and will remain in force until March 31, 2027, unless reviewed or extended by the commission earlier.

  • Guidelines by the Delhi Commission Empower Renewable Energy Consumers through Peer-to-Peer Transactions

The Delhi Electricity Regulatory Commission (DERC) has introduced directives facilitating peer-to-peer energy transactions to promote renewable energy adoption and create additional income streams for consumers. These guidelines apply to prosumers and eligible consumers with a sanctioned load of up to 200 kW, allowing renewable energy systems limited to 500 per cent of their sanctioned load. To engage in such transactions, participants must have time-of-day compliant or smart meters installed, as regulated by DERC guidelines. Prosumers can transact up to 20 per cent of their renewable energy system’s capacity per day, with billing conducted based on meter data in accordance with distribution licensee cycles. Disputes are resolved through consumer grievance redressal forums, and charges for renewable energy systems in peer-to-peer transactions may be waived until March 31, 2026, subject to commission decisions. DERC also oversees network augmentation and adjusts guidelines as needed.

  • Gujarat Commission Unveils Regulations for Green Energy Open Access (GEOA) in 2024

The Gujarat Electricity Regulatory Commission (GERC) has introduced new regulations titled the Gujarat Electricity Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2024, which encompass guidelines for banking and various charges associated with green energy open access (GEOA). These regulations are designed to streamline the GEOA process for consumers, generators, and licensees in the state, ensuring fair and impartial access to renewable energy sources like solar, wind, and biomass. Applicable to individuals with a contracted demand of at least 100 KW, the regulations categorize GEOA into long-term, medium-term, and short-term access types, each with specific durations and application procedures. Consumers must adhere to documentation and fee requirements, declare non-execution of multiple power purchase agreements for the same capacity, and maintain consistency in power consumption to prevent demand fluctuations. The application process involves submission through a central portal, validation by the state nodal agency, and adherence to set charges, including transmission, wheeling, and cross-subsidy surcharges. Compliance ensures continued access and avoids penalties such as revocation of captive status and charge retrieval.

  • Ministry of Power introduces amendments to the Electricity (Rights of Consumers) Rules 2020

MoP has approved amendments to the Electricity (Rights of Consumers) Rules, 2020, aiming to facilitate the installation of rooftop solar photovoltaic (PV) systems and enhance consumer options. Notably, a waiver has been granted for technical feasibility studies for rooftop solar systems up to 10 kW capacity, with a shortened timeframe of fifteen days for systems exceeding 10 kW. Distribution companies are now mandated to bear the costs of necessary system strengthening for rooftop solar PV systems up to 5 kW, and the commissioning period has been reduced to fifteen days. Additionally, consumers can now obtain separate electricity connections for electric vehicle charging, and amendments promote transparency in metering and billing processes. Cooperative group housing societies and multi-storied buildings can choose between individual or centralized connections, determined through transparent balloting, with tariff parity ensured. Separate procedures are established for metering, billing, and collection for personal, backup, and common area electricity consumption.


Rajasthan Rajya Vidyut Prasaran Nigam Limited (“RRVPNL”) filed a petition before the Rajasthan Electricity Regulatory Commission (“RERC”), seeking approval of purchase of 1,000 MW of power through competitive bidding. PPAs were signed with the lowest bidders, for the initially proposed 1,000 MW quantum. However, the Government of Rajasthan (“Government”) approved a purchase of only 500 MW. Thereafter, bidders L-2 and L-3 appealed to the Hon’ble Appellate Tribunal for Electricity (“APTEL”), which ruled in their favour, deeming the aforesaid reduction of the Rajasthan government as incorrect. But on an appeal to the Supreme Court, the APTEL decision was overturned, thereby restoring the position of the Government. At the same time, M.B. Power, filed a writ petition before the Rajasthan High Court (“High Court”), seeking a letter of intent and to enter into a PPA with Jaipur Vidyut Vitran Nigam Limited (“JVVNL”), permission for which was granted by the High Court. Dissatisfied with the decision of the High Court, JVVNL has filed this Civil Appeal before the Hon’ble Supreme Court (“Apex Court”).

The following issues were contended before the Apex Court – (a) Whether RERC had the power to consider consumer’s interest and reject the bid if it is not aligned to market prices ?, (b) Whether High Courts can exercise power of judicial review in the absence of extraordinary and exceptional circumstances while there exists an alternate efficacious remedy ? and (c) Whether High Court can issue a writ of mandamus to the instrumentalities of the State to enter into a contract in disregard to the public interest ?

The Apex Court observed that state commissions have the power to regulate, which includes the power to determine or adopt tariff. The Electricity Act, 2003, besides giving state commissions the power to regulate electricity purchase and procurement process of distribution licensees, also empowers state commissions to regulate the matters, including the price at which electricity shall be procured from the generating companies. The argument of M.B. Power that procurer is bound to accept all bids emerged in a competitive bidding process once the said process was found to be transparent and in compliance with the bidding guidelines, was rejected by the Supreme Court.

In light of the above, the Apex Court held that the High Court’s issuance of a mandamus directing M.B. Power to enter into a contract lacked jurisdiction, and set aside the impugned judgement and order passed by the High Court as being unsustainable in law, since it failed to take into consideration the larger consumer and public interest.

This Petition was filed by M.P. Power Management Company (“MPPMCL”) against National Thermal Power Corporation Limited (“NTPC”), wherein MPPMCL sought revision of tariff orders issued from 2004 to 2020 in respect of various generating stations of NTPC by re-allocation of the Foreign Exchange Rate Variance (“FERV”) amount against debt liability in place of allocation of the same between debt and equity, on the basis of the Hon’ble Supreme Court Judgement in Civil Appeal No. 13542 of 2015, which held that the entire FERV should be apportioned only in respect of debt liability.

CERC held that with regards the issue of retrospective re-allocation of FERV amount against debt liability, the aforementioned Supreme Court Judgement cannot be considered law under Article 141 of the Constitution. The determination of tariff is a multi-stage process, which provides ample opportunities to parties to challenge, not only at the stage of determination, but also at a later stage. Furthermore, CERC held that since the tariff orders sought to be revised by MPPMCL have already attained finality, they cannot be retrospectively revised.

NTPC Limited (“NTPC”) had filed a petition under Section 79(1)(a) of the Electricity Act, 2003, seeking compensation, on account of imposition of safeguard duty by the Ministry of Finance vide its notification No. 02/2020-Customs(SG) dated 29 July 2020 (“Notification”), as a “Change in Law” event under Article 12 of the Power Purchase Agreement (“PPA”) dated 25 October 2019, executed between NTPC and Solar Energy Corporation of India.

CERC held that the aforesaid Notification is indeed a “Change in Law” event falling under the purview of Article 12 of the PPA, which affected NTPC’s project, and thereby, entitling it to compensation for the additional expenditure incurred for its 160 MW solar project in Rajasthan.

Furthermore, CERC has also directed the contracting parties to carry out the reconciliation of additional expenditure along with the carrying cost; and that late payment surcharge shall be payable for the delayed period, corresponding to each such delayed Monthly Annuity Payment(s), as per respective PPA.


The content provided in this newsletter is intended for general awareness and should not be considered as legal advice. Readers are advised to consult with a qualified legal professional regarding any specific issues mentioned herein. If you have any questions about any of these developments or would like to see something different next month, reach out to us at

We will be back next month with another update. Thank you for reading!