CERC decision on tariff upheld

The Supreme Court dismissed a large number of appeals by electricity consuming companies in the eastern part of the country, challenging the ruling of the Appellate Tribunal for Electricity on the question of fixing tariff.

The main issue was the applicability of the provisions of the Electricity Act of 2003 in relation to those of the Damodar Valley Corporation Act of 1948. In this batch of judgments, led by Bhaskar Shrachi Alloys Ltd vs DVC, the court gave weight to the new law, as did the Appellate Electricity Tribunal which had earlier dismissed the companies’ challenge to the tariff. They had raised issues regarding the depreciation rate, sinking fund, debt-equity ratio, return of capital investment revenue relating to afforestation and period of transition. The judgment stated that under Section 79 of the Electricity Act, it was the Central Electricity Regulatory Commission (CERC) which would be the “appropriate commission” to determine the tariff as DVC is a corporation under the central government. It upheld the decision of the CERC.