The Appellate Tribunal for Electricity recently provided a detailed legal analysis on the issue of additional surcharge for captive consumers. The decision delved into the intricate provisions of the Electricity Act, highlighting the distinct classes of consumers and the statutory rights of captive users. Stay tuned to learn more about the Tribunal’s insightful interpretation of the law.
Facts
- The Appellate Tribunal for Electricity, Delhi allowed the appeals of the respondents, who are ‘captive consumers’, and set aside the order of the State Commission.
- The Maharashtra Electricity Regulatory Commission had held that the group of ‘captive consumers’ must pay an additional surcharge.
- The Maharashtra State Electricity Distribution Company Limited has filed the present appeals feeling aggrieved with the Tribunal’s decision.
- The State Commission considered the appellant’s petitions for MYT approval and true up of ARR for multiple financial years.
- The appellant filed a revised Review Petition for final true up of ARR for specific financial years and approval of revised forecast of ARR for upcoming years.
- One of the key prayers in the appellant’s petition was to approve additional surcharge for all open access consumers, including those sourcing power from CPPS.
- This additional surcharge was proposed for the financial years 2018-2019 to 2019-2020.
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Analysis
- The Appellate Tribunal rightly held that captive consumers/captive users are not liable to pay the additional surcharge under Section 42(4) of the Act, 2003.
- Captive consumers and consumers defined under Section 2(15) are distinct classes, and captive consumers invest significantly in construction and operation of generating plants.
- The right to open access for captive users is granted by the Act without requiring State Commission permission, with State Commission’s role limited to adjudication in case of disputes.
- The State Commission held that additional surcharge under Section 42(4) is not applicable to captive users for their self-consumption from such plants.
- The Appellate Tribunal’s order set aside the State Commission’s decision to levy additional surcharge on captive users, confirming that they are not liable to pay it.
- Construction, maintenance, and operation of captive generating plants and dedicated transmission lines do not require State Commission permission as per Section 9 of the Act, 2003.
- The Appellate Tribunal held that group of captive users are not liable to pay additional surcharge to the distribution licensee as per Section 42(4) of the Act, 2003.
- The distribution licensee was directed to refund the additional surcharge already recovered from captive consumers, with adjustments in future wheeling charges bills.
- The Act allows two classes of consumers: ordinary consumers supplied by distribution licensees, and captive consumers permitted to generate for their own use under Section 9.
- The submission that captive generation is subject to regulations and additional surcharge under Section 42(4) was rejected, as captive users do not require State Commission permission for their activities.
- Captive generation is permitted under Section 9(1) of the Electricity Act.
- Open access for consumers requiring electricity exceeding one megawatt should be provided within five years.
- Consumers can request supply from sources other than the distribution licensee with permission from the State Commission.
- Additional surcharge may be applicable to consumers receiving electricity from sources other than the distribution licensee.
- Captive users have the statutory right to access electricity without requiring permission.
- Distribution licensees have the duty to maintain an efficient distribution system and supply electricity as per the Act.
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Case Title: MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO LTD Vs. M/S JSW STEEL LIMITED (2021 INSC 866)
Case Number: C.A. No.-005074-005075 / 2019
