Pro-rata electricity infrastructure charges upheld where regulations permit recovery of reasonable supply costs.

A pro-rata charge for high-tension and extra high-tension electricity supply was upheld as within regulatory authority because the governing framework permitted recovery of reasonably incurred infrastructure costs. Regulation 5 of Chapter V contemplated estimation of costs for new HT/EHT lines, new substations, and augmentation of existing substations, with the differential cost forming the basis for pro-rata recovery. The charge was treated as a uniform mechanism to recover infrastructure expenditure from actual users rather than spread it across all consumers, and the challenge on arbitrariness, lack of rational basis, and Article 14 violation was rejected.

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Issues: Whether the levy of pro-rata charges of Rs. 850 per KVA for high tension and extra high tension supply under the GERC notification and Regulation 5 of Chapter V was arbitrary, unreasonable, or without authority of law.

Analysis: The regulatory framework empowered the State Commission to authorize a distribution licensee to recover expenses reasonably incurred in providing electric lines or electrical plant for supply of electricity. Regulation 5 of Chapter V specifically contemplated estimation of cost for new HT/EHT lines, new substations, and augmentation of existing substations, and provided that differential cost would form the basis for pro-rata charges. The charge was adopted as a uniform recovery mechanism to avoid disparity among beneficiaries and to recover infrastructure cost from actual users rather than burdening all consumers. The challenge that the amount was unsupported by rational basis or actual expenditure was therefore not accepted.

Conclusion: The levy of Rs. 850 per KVA on a pro-rata basis was held to be within regulatory authority and not arbitrary, irrational, or violative of Article 14 of the Constitution of India.

Ratio Decidendi: Where the statute and valid regulations authorize recovery of reasonably incurred expenditure for providing supply, a pro-rata charge based on estimated differential infrastructure cost is lawful unless shown to be arbitrary or unreasonable.

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