Supreme Court Quashes Tata Power Plea Against Mumbai Transmission Contract To Adani Power
Tata Power had challenged the grant of Kudus-Aarey project, claiming it was not executed through tariff-based competitive bidding.
The Supreme Court dismissed an appeal by Tata Power Ltd. challenging grant of a contract for setting up a transmission link in Mumbai to Adani Power Ltd.
Tata Power had challenged the contract for high voltage direct current Kudus-Aarey project, on the grounds that it was not executed through a tariff-based competitive bidding process.
A bench led by Chief Justice DY Chandrachud, and comprising Justices AS Bopanna and JB Pardiwala, ruled that the Electricity Act, 2003 provides the states flexibility to regulate the intra-state transmission systems, wherein the appropriate state commissions can determine and regulate tariff.
The bench noted that the Maharashtra Electricity Regulatory Commission has neither framed regulations nor notified guidelines prescribing the criteria for choosing the modalities to determine tariff.
"Thus, MERC shall determine the tariff by exercising its general regulatory powers," it said.
As MERC had not notified the threshold limit for Maharashtra, it was open to allot the contract "either under the regulated tariff mechanism or the tariff-based competitive bidding route", the judgement read.
The bench also pointed out that the flippant functioning of Maharashtra Electricity Regulatory Commission in the implementation of HVDC technology in the state had "led to the loss of time and investment".
The bench directed all state regulatory commissions to frame regulations on the terms and conditions for determination of tariff within three months.
"While framing these guidelines on determination of tariff, the appropriate commission shall be guided by the principles prescribed in Section 61, which also includes the National Electricity Policy and National Tariff Policy," the bench ruled. The provision deals with tariff regulations.
If the commissions in a state have already framed the regulations, "they shall be amended to include provisions on the criteria for choosing the modalities to determine the tariff, in case they have not been already included".
On March 21, 2021, the MERC had granted a transmission licence to AEMIL for setting up a 1,000 MW HVDC (voltage source converters-based) link between the MSETCL Kudus station and AEML Aarey EHV station.
Tata Power had challenged the MERC order before the Appellate Tribunal for Electricity, which had dismissed the appeal on Feb. 18, 2022.
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