Summary
The Court held that captive consumers using electricity from their captive generating plants were not liable for the additional surcharge under Section 42(4) of the Electricity Act. Their open-access right arose directly under Section 9, subject to adequate transmission capacity, rather than from permission of the State Commission of the kind contemplated by Section 42(4). Captive users also constituted a distinct class because of their generation investments. Surcharge collected under the interim stay was directed to be adjusted against future wheeling bills.
Issues
- Whether captive users were liable for the additional surcharge under Section 42(4).
- How surcharge collected under the Court’s interim stay should be returned.
Provisions considered
- Section 9, Electricity Act, 2003Captive generation and open access for own use were statutory rights, conditioned by transmission availability rather than prior State Commission permission. (¶ 8-9)
- Sections 2(15) and 42(4), Electricity Act, 2003The additional-surcharge provision concerning Commission-permitted supply from another person was distinguished from captive own-use generation. (¶ 11-14)
Held
- Section 9 conferred the right to construct, maintain or operate captive generation and carry electricity to the destination of own use. Grid regulation and the requirement of adequate transmission facilities did not turn that statutory right into one dependent on State Commission permission; disputes over facility availability could be adjudicated by the Commission. (¶ 8-9)
- Section 42(4) applied where the Commission permitted a consumer to receive electricity from a supplier other than the area distribution licensee. Captive users exercised an independent statutory right and did not attract that condition for additional surcharge. The decision concerned captive own-use supply, not a general exemption from all grid or wheeling charges. (¶ 11-13)
- Additional surcharge compensated a distribution licensee for fixed supply costs in the circumstances contemplated by Section 42(4). Captive users, who invested in their own generation and transmission facilities, formed a distinct class and could not be subjected to that surcharge as ordinary consumers. (¶ 13-14)
- Surcharge recovered from captive users during the interim stay had to be returned. To avoid imposing an immediate lump-sum burden on the licensee, the amounts were to be adjusted in future wheeling-charge bills. (¶ 16)
Result
Licensee’s appeals dismissed without costs; Tribunal’s exemption of captive users from Section 42(4) additional surcharge upheld. Amounts already recovered directed to be adjusted against future wheeling-charge bills.