ERC has sole power to set tariff, says Supreme Court

Setting aside a Calcutta High Court order, the Supreme Court on Thursday held that the electricity regulatory commission (ERC) of each state has the ‘sole authority’ to determine power tariff in respective states. A three-judge bench comprising Justice N. Santosh Hegde, Justice B.N. Agrawal and Justice B.P. Singh gave this ruling while considering the issue as to who could determine the tariff under the Electricity Regulatory Commissions Act, 1998. The Calcutta High Court had proceeded on the basis that it was the licensee which in the first instance had to determine the tariff. This had to be subsequently scrutinised and approved by the commission. The high court was therefore of the view that the role of the commission in determining tariff was only supervisory.

In the present case, the West Bengal Electricity Regulatory Commission, by an order of November 7, 2001, determined the tariff for the sale of electricity by CESC, the management of which was taken over by the R.P. Goenka group, for 2000-01 and 2001-02. Aggrieved by the tariff determination, CESC filed an appeal before the Calcutta High Court which allowed the appeal and re-determined the tariff, enhancing the same. The appeals filed before the apex court are against the high court order.

On the locus standi of the consumers to appear before the commission, the bench held that the commission had the necessary statutory power to frame regulations conferring the right of hearing on the consumers.