Supreme Court Interprets Electricity Act: State Commissions Cannot Exceed Their Mandate
- ByAdmin --
- 07 Apr 2025 --
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On March 22, 2025, the Supreme Court clarified a crucial issue under the Electricity Act, 2003—state electricity regulatory commissions (SERCs) cannot step beyond their statutory authority to impose terms on private power developers.
It was a ruling that redefined the limits of regulation.
The Case
A private solar energy company had entered into a Power Purchase Agreement (PPA) with a state utility. The SERC later added extra conditions to the PPA without the company’s consent.
The developer took the matter to court, claiming overreach.
What the Court Held
- SERCs are regulators, not lawmakers
- They can frame guidelines, but cannot unilaterally alter contracts
- Any intervention must be within the confines of Sections 86 and 94 of the Act
Why It Matters
The verdict reinforces:
- Sanctity of contracts in the energy sector
- Encouragement for private players in renewables
- Checks and balances on quasi-judicial authorities
This ruling is a victory for investor confidence in India’s power infrastructure.
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