2024 (5) TMI 1266 - SC - Indian Laws

Distribution licensee cannot impose reliability charges on customers already paying higher tariffs for uninterrupted supply

Maharashtra State Electricity Distribution Co. Ltd. Versus M/s JSW Steel Ltd. & Anr.

The SC dismissed an appeal challenging the legality of a reliability charge for Zero Load Shedding imposed by a distribution licensee under the ... Distribution and supply of electricity - Legality of the imposition of a reliability charge on account of Zero Load Shedding (ZLS) by a distribution licensee under the Electricity Act, 2003 - Whether the 1st respondent was liable to pay the reliability charge - HELD THAT:- It cannot be disputed that the 1st respondent was directly affected by the levy of the reliability charge. Hence, the first respondent was the person aggrieved within the meaning of Section 111. In the appeal, the appellant was entitled to challenge the legality of the impugned order of the Commission. Nothing in the 2003 Act suggests that a consumer who does not participate in the Commission's public hearing and is aggrieved by an order of the Commission is disentitled to prefer an appeal. It is an admitted position that 1st respondent, a continuous process industry on express feeder, paid a higher tariff during the relevant period of July 2009 to April 2010 to enable it to get supply without load-shedding. We find no error in the view taken by the Tribunal that the appellant was not entitled to impose a reliability charge on customers like the 1st respondent. Hence, we find no merit in the appeal, and the same is dismissed. Issues involved: The legality of the imposition of a reliability charge by a distribution licensee under the Electricity Act, 2003.Factual Aspect: The appellant, a distribution licensee, imposed a reliability charge for uninterrupted power supply, which was challenged by a steel industry, the 1st respondent, before the Appellate Tribunal for Electricity. The Tribunal set aside the order of the State Commission imposing the reliability charge.Submission: The appellant argued that the reliability charge was justified under Section 62(3) of the 2003 Act and that non-participation in the public hearing by the 1st respondent amounted to consent to pay the charge. The appellant contended that the 1st respondent, as a bulk consumer enjoying uninterrupted power supply, was liable to pay the charge.Consideration of Submissions: The Tribunal found that the 1st respondent, a continuous process industry not subjected to load-shedding, was already paying higher tariffs than non-continuous industries. The Tribunal held that there was no legal basis for the imposition of the reliability charge as per the Act and regulations. The 1st respondent's objection through an industry association was noted, and the Tribunal affirmed the right of an aggrieved party to appeal under Section 111 of the 2003 Act.The Tribunal also highlighted that the appellant had filed a Review Petition seeking an additional supply charge instead of a reliability charge. It was acknowledged that the 1st respondent had paid higher tariffs during the relevant period for uninterrupted power supply. Ultimately, the Tribunal's decision that the reliability charge was not justified for customers like the 1st respondent was upheld, leading to the dismissal of the appeal.