New Delhi, Jul 16 (PTI) The Supreme Court on Wednesday upheld Himachal Pradesh's right to avail free of cost 18 per cent of power generated by JSW Hydro Energy Limited under agreement.

A bench of Justices P S Narasimha and Joymalya Bagchi, in the process, set aside the Himachal Pradesh High Court verdict modifying the implementation agreement between the state and the private firm and capped free power supply to 13 instead of 18 per cent.

Allowing the plea of the state government, the bench was critical of the fact that the high court intervened in the tariff fixation aspect, a domain which falls under the Central Electricity Regulatory Commission (CERC).

“Under the Electricity Act, the statutory regulator has been entrusted with discharging the function of tariff determination, including making regulations for the purpose and interpreting the same," it said.

The 54-page verdict, penned by Justice Narasimha, continued, "Constitutional courts must enable the regulator to comprehensively regulate all aspects of the sector such that remedies are not fragmented and certain issues are not left outside the regulator’s domain." The verdict said the regulator has the expertise, specialisation, and institutional memory to conduct such an interpretative exercise to further the objective of the regulatory regime and systematically lay down legal principles.

“The high court should not have entered into the domain of interpreting these regulations which deal with tariff determination, as the same falls within the exclusive domain of the CERC,” it said.

The bench held the CERC Regulations, 2019, did not prohibit the private firm from supplying free power beyond 13 per cent to the state and the Implementation Agreement did not stand overridden by these regulations.

“Further, a writ petition before the High Court for aligning the Implementation Agreement with the CERC Regulations, 2019 and the CERC’s order dated 17.03.2022 is not maintainable,” it held.

JSW Hydro Energy Limited, a power generating company, operates a 1,045 MW hydroelectric project at Karcham Wangtoo, originally allotted to Jaiprakash Industries Limited through a Memorandum of Understanding in 1993.

Under the subsequent Implementation Agreement with the Himachal Pradesh government, JSW (through its predecessor) agreed to provide 18 per cent of net power generation to the state free of cost after the first 12 years of commercial operation.

Later, the JSW approached the CERC and then the high court when the state did not agree to limit the free power to 13 per cent.

The high court ruled in the company’s favour and directed the state to align its Implementation Agreement with the CERC regulations. PTI SJK SJK AMK AMK

Tariff determination exclusivity: regulator's domain precludes high court reinterpreting implementation agreement on free power. The Supreme Court determined that tariff fixation and interpretation of tariff regulations fall within the exclusive competence of the statutory regulator, and that the High Court erred in intervening. It held that the CERC Regulations, 2019 did not prohibit the supplier from providing free power beyond the specified percentage and that a writ petition seeking to align the Implementation Agreement with those regulations and a CERC order was not maintainable.