Jurisdiction of RERC – Whether RERC could regulate inter-state open access under the Electricity Act, 2003. Held: Yes, as the Act empowers State Commissions to oversee intra-state transactions, even if power originates outside the state (Paras 44–50).

Penalties for Drawal Variations – Whether penalties for deviations from contracted demand unreasonably restrict open access. Held: No, as they ensure grid discipline and prevent gaming (Paras 51–54).

Validity of Regulation 26(7) – Whether the 24-hour advance notice requirement for short-term inter-state open access is ultra vires. Held: No, as it promotes grid stability and allows urgent procurement through alternative markets (Paras 55–58).

Discrimination Against Captive Power Plants (CPPs) – Whether Regulation 21 unfairly disadvantages CPPs. Held: No, as the distinction between CPPs and DISCOMs is based on functional differences (Paras 59–62).

Foreclosure of Open Access Rights – Whether the 2016 Regulations effectively deny open access. Held: No, as the conditions are reasonable safeguards (Paras 63–65).

Dismissed all appeals, upholding the High Court’s orders.

Major Acts and Provisions:

1. Electricity Act, 2003 – Sections 2(15), 2(36), 2(47), 9, 32, 33, 42, 79, 86, 178, 181.

2. Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016 – Regulations 5, 6, 21, 26.

Subjects:

Electricity regulation, Open access, Grid stability, Captive generation, Jurisdictional demarcation, Penalties for deviation, Scheduling requirements.

Facts:

1. Nature of Litigation: Civil appeals challenging Rajasthan High Court orders upholding the RERC’s 2016 Open Access Regulations.

2. Appellants: Industrial consumers and captive power generators (e.g., Ramayana Ispat, Hindustan Zinc) alleging arbitrary restrictions on open access.

3. Respondents: State of Rajasthan, RERC, and distribution licensees defending the regulations as necessary for grid stability.

4. Background:

   • The 2016 Regulations replaced the 2004 framework, imposing stricter scheduling, penalties for deviations, and limits on simultaneous drawal from open access and DISCOMs.

   • Appellants argued the regulations violated their statutory rights under Sections 9 and 42 of the Electricity Act, 2003, and encroached on CERC’s jurisdiction over inter-state transactions.

Issues:

1. Whether RERC exceeded its jurisdiction by regulating inter-state open access.

2. Whether penalties for drawal variations are unreasonable.

3. Whether Regulation 26(7)’s 24-hour notice period creates artificial barriers.

4. Whether Regulation 21 discriminates against CPPs.

5. Whether the 2016 Regulations foreclose open access rights.

Submissions:

• Appellants:

  • RERC lacks jurisdiction over inter-state open access (CERC’s domain under Section 79).

  • Penalties and scheduling requirements are arbitrary and discourage captive generation (Sections 9, 42).

• Respondents:

  • RERC’s authority extends to intra-state delivery, irrespective of power source (Sections 42, 86).

  • Regulations ensure grid stability and prevent gaming (Sections 32, 33).

• Ratio:

  • RERC’s regulations are intra-state in nature and valid under Sections 42 and 181 (Para 67).

  • Conditions like penalties and advance notice are proportionate to grid management needs (Para 68).

  • No discrimination against CPPs; distinctions are functionally justified (Para 62).