Commission Notes PSPCL Had Issued Circular Allowing Cluster Sub-Stations For Non-Contiguous Premises Despite Earlier Rejection Of Such Proposal
Chandigarh, April 30: The Punjab State Electricity Regulatory Commission has dropped suo motu proceedings initiated against Punjab State Power Corporation Limited under Section 142 of the Electricity Act, 2003, in connection with the issuance of a commercial circular permitting cluster sub-stations for HT/EHT consumers having non-contiguous premises.
However, while dropping the proceedings, the Commission recorded that PSPCL had committed violation of the Supply Code Regulations and directions issued by the Commission by issuing Commercial Circular No. 01/2026 dated 08.01.2026. The Commission cautioned PSPCL to strictly adhere to the regulations and directions of the Commission in future and to desist from taking any action in violation thereof.
The order was passed by a Bench comprising Ravinder Singh Saini, Member-cum-Chairman, and Ravi Kumar, Member, in Suo Motu Petition No. 05 of 2026.
Background
The matter arose from Regulation 25 of the Punjab State Electricity Regulatory Commission (Electricity Supply Code, Standards of Performance and Related Matters) Regulations, 2024.
Regulation 25 provides for installation of a 33 kV or higher voltage cluster sub-station by a group of new or existing HT/EHT consumers, subject to specified conditions. One of the essential conditions under the regulation is that such consumers must have contiguous premises and their total contract demand must be above 5000 kVA.
PSPCL had earlier filed Petition No. 37 of 2025 seeking amendment of Regulation 25 so that the facility of cluster sub-station could also be extended to consumers having non-contiguous premises.
Since the proposed amendment involved regulatory and tariff implications, the matter was referred to the Supply Code Review Panel. The Panel did not recommend PSPCL’s proposal, observing that the proposed amendment could lead to legal issues.
Thereafter, by order dated 14.10.2025, the Commission rejected PSPCL’s proposal for amendment of Regulation 25.
PSPCL Issued Circular Despite Rejection Of Amendment Proposal
Despite the Commission’s earlier decision, PSPCL issued Commercial Circular No. 01/2026 dated 08.01.2026 allowing the facility of cluster sub-station to HT/EHT consumers having non-contiguous premises.
The Commission viewed the circular as being in contravention of Regulation 25 of the Supply Code, 2024 as well as its order dated 14.10.2025.
According to the Commission, PSPCL, being a distribution licensee, had no authority under the Electricity Act, 2003 to amend or dilute the regulations framed by the Commission at its own level.
The Commission, therefore, issued directions to PSPCL on 03.02.2026 stating that Commercial Circular No. 01/2026 was void ab initio and should be withdrawn immediately. It further stated that even without formal withdrawal, the circular would be treated as a nullity and any action taken under it would be illegal.
PSPCL was also directed to show cause within seven days as to why action under Section 142 of the Electricity Act should not be initiated for contravention of the Act, regulations and Commission’s order.
Suo Motu Proceedings Initiated
The Commission noted that PSPCL neither withdrew the circular nor submitted reply to the show cause notice within the stipulated period.
In view of the alleged willful contravention of Regulation 25, non-compliance of the order dated 14.10.2025 and non-compliance of the directions dated 03.02.2026, the Commission initiated suo motu proceedings under Section 142 of the Electricity Act, 2003.
The Chief Engineer/Commercial, PSPCL was directed to appear before the Commission.
PSPCL’s Defence
PSPCL submitted that the circular was issued in the interest of consumers who were facing hardship due to right of way and space constraints in release of electricity connections.
It was argued that allowing cluster sub-stations for non-contiguous premises would avoid the need for new 66 kV lines or new 66 kV sub-stations, save time and resources, and allow better utilization of existing infrastructure.
PSPCL stated that the matter had been placed before its Board of Directors and, after approval, Commercial Circular No. 01/2026 was issued.
It further submitted that the circular was not issued with any intention to violate the Commission’s regulations or directions.
During the hearing, the Chief Engineer/Commercial informed the Commission that the circular had been withdrawn and expressed regret. PSPCL requested that proceedings under Section 142 be dropped.
No Consumer Case Processed Under Circular
The Commission directed PSPCL to submit an affidavit disclosing whether any consumer or applicant case had been processed under the circular dated 08.01.2026.
In compliance, PSPCL submitted that Commercial Circular No. 01/2026 had been withdrawn on 17.02.2026 and that no case of any applicant or consumer had been processed under the provisions of the said circular.
Commission’s Findings
The Commission observed that PSPCL had committed violation of the regulations and directions issued by the Commission by issuing Commercial Circular No. 01/2026.
However, it took note of the fact that the circular had been withdrawn and no case had been processed under it.
The Commission also considered PSPCL’s plea that the delay in responding to the show cause notice was inadvertent and due to procedural delay.
In these circumstances, the Commission dropped the proceedings under Section 142 of the Electricity Act, 2003.
PSPCL Cautioned
While dropping the proceedings, the Commission issued a clear caution to PSPCL to ensure compliance with the regulations and directions of the Commission in future.
The Commission further directed PSPCL to desist from taking any action in violation of regulatory provisions or Commission directions.
Key Takeaway
The order is significant because it reiterates that a distribution licensee cannot, through a commercial circular, alter or expand the scope of regulations framed by the State Electricity Regulatory Commission.
Even where the licensee claims consumer convenience or practical difficulty, any change in regulatory conditions must be brought through proper regulatory amendment and not through unilateral administrative instructions.
At the same time, the Commission adopted a lenient approach by dropping penal proceedings under Section 142 after PSPCL withdrew the circular and confirmed that no consumer case had been processed under it.