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State Commission cannot re-determine tariff of companies if already determined by Central Commission

In Bhakra-Beas Management Board (BBMB) v. Punjab State Electricity Regulatory Commission (PSERC),  order dated 6.09.2017, while deciding an appeal, the Appellate Tribunal for Electricity  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 of this Tribunal by going into the issue of apportionment of costs between the power and irrigation wings of BBMB.

The appellant, BBMB is a Generating Company involved in the inter-state transmission of electricity. Respondent 2, PSPCL is the successor entity of the erstwhile Punjab State Electricity Board. The appeal was filed under Section 111 of the Electricity Act, 2003 against the order passed by the State Commission wherein the State Commission determined the ARR and tariff of PSPCL for FY 2016-17, including the cost of generation and inter-state transmission of electricity from projects operated and maintained by the appellant.

The Tribunal while deciding the appeals dealt with the question that, whether in terms of Section 79 of the Electricity Act, 2003 read with Rule 8 of the Electricity Rules, 2005, the State Commission had jurisdiction to examine the methodology being followed by BBMB regarding apportionment of costs between its power and irrigation wing and whether the State Commission exceeded the scope of the order of this Tribunal by going into the issue of apportionment of costs between the power and irrigation wings of BBMB?

The Tribunal perused the above-mentioned provisions and held that it is not open to the State Commission to re-determine the tariff of the generating companies whose tariff is determined by the Central Commission under Section 79 of the Act. What is left to the State Commission is that they may determine whether a Distribution Licensee in the State should enter into Power Purchase Agreement or procurement process with such generating companies based on the tariff determined by the Central Commission.

On the issue of jurisdiction, it was held that the Central Commission has the jurisdiction in matters of tariff related to the appellant and the State Commission was not supposed to adjudicate the tariff matters of the appellant. The State Commission went into the details of the submissions. This amounts to re-determination of the tariff of the appellant which falls under the jurisdiction of the Central Commission. The State Commission overstepped its jurisdiction while limiting the liability of PSPCL towards the appellant and also exceeded the scope of the order of this Tribunal by going into the issue of apportionment of costs between the power and irrigation wings of BBMB.

Article referred: http://blog.scconline.com/post/2017/10/05/state-commission-cannot-re-determine-tariff-of-companies-if-already-determined-by-central-commission-under-s-79-of-electricity-act/

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