Tribunal Holds Rajasthan Open Access Regulations, 2016 Prevail Over Earlier Contractual Arrangements; Wheeling Charges Payable On Contracted Or Utilised Capacity, Whichever Is Higher
New Delhi: The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by M/s BSL Ltd., a High Tension consumer of Ajmer Vidyut Vitran Nigam Limited (AVVNL), challenging the levy of wheeling charges on the basis of open access capacity rather than actual energy wheeled. The Tribunal held that after coming into force of the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016, wheeling charges for open access consumers are required to be determined on the basis of open access capacity contracted or open access capacity utilised, whichever is higher.
The judgment was delivered in Appeal No. 142 of 2021 on 11 August 2026 by a Bench comprising Hon’ble Mr. Virender Bhat, Judicial Member and Hon’ble Mr. Ajay Talegaonkar, Technical Member. The appeal was filed by M/s BSL Ltd. against the order dated 23 April 2019 passed by the Rajasthan Electricity Regulatory Commission (RERC) in Petition No. 1393 of 2018, whereby the State Commission had upheld the methodology adopted by AVVNL for levy of wheeling charges.
Background Of The Dispute
M/s BSL Ltd. is a company incorporated under the Companies Act and was an HT consumer of AVVNL with a contracted demand of 6460 KVA. AVVNL was the distribution licensee responsible for supply of electricity in its licensed area and had levied the disputed wheeling charges on the appellant.
The dispute arose from the open access arrangement entered into by BSL Ltd. for utilisation of electricity generated from its captive wind power project.
The appellant had entered into a Wheeling and Banking Agreement dated 19.03.2013 with Inox Renewables Limited, followed by a Wheeling Agreement dated 20.03.2013 with Rajasthan Rajya Vidyut Prasaran Nigam Limited and Inox Renewables Limited for wheeling of power generated from its captive wind project.
During February and March 2018, BSL Ltd. disputed the wheeling charges imposed by AVVNL and alleged that excess recovery had been made. The company submitted representations before the distribution licensee challenging the calculation methodology.
AVVNL, however, informed the appellant through communication dated 22.03.2018 that the wheeling charges had been levied strictly in accordance with Regulation 15 of the RERC Open Access Regulations, 2016.
After rejection of its grievance by the SLDC and State Power Committee, BSL Ltd. approached RERC challenging the levy. The State Commission dismissed the petition and upheld AVVNL’s methodology, leading to the appeal before APTEL.
BSL Ltd.’s Challenge Before APTEL
Appearing for the appellant, Ms. Pallavi Garg and Ms. Sanjana Sharma Sahu argued that RERC had wrongly applied the Open Access Regulations, 2016 to BSL Ltd. despite the contractual arrangement under the Wheeling and Banking Agreement. The appellant contended that the Wheeling and Banking Agreement specifically provided that wheeling charges would be governed by the RERC order dated 23.01.2009 and amendments made from time to time. According to BSL Ltd., the subsequent Open Access Regulations, 2016 could not automatically change the basis of calculation agreed under the contract.
The appellant argued that the earlier methodology was based on actual energy wheeled, whereas the new methodology introduced by the Open Access Regulations, 2016 calculated charges on the basis of capacity. It was submitted that the change substantially increased the financial burden on the consumer. The appellant pointed out that under the earlier calculation method, wheeling charges were approximately Rs. 2,82,245, whereas under the new methodology the liability increased to approximately Rs. 19,27,200, resulting in an additional burden of around Rs. 16,44,954.
BSL Ltd. argued that such methodology was arbitrary and contrary to the applicable regulations and contractual understanding between the parties.
AVVNL’s Defence
Representing AVVNL, Mr. Parinitoo Jain and Mr. Abhav Jain opposed the appeal and submitted that the levy was fully consistent with the Open Access Regulations, 2016. AVVNL argued that after introduction of the 2016 Regulations, open access consumers were required to pay wheeling charges on the basis of open access capacity contracted or utilised, whichever was higher.
According to AVVNL, open access is granted based on reserved capacity and not merely actual consumption of electricity during a particular period. Therefore, even if a consumer does not utilise the entire capacity every month, the distribution system remains reserved for that capacity and charges are recoverable accordingly.
The respondents further argued that the Wheeling and Banking Agreement itself contained provisions requiring parties to comply with future amendments in applicable laws, policies, rules and regulations. Therefore, the appellant could not claim continuation of the old methodology after a new regulatory framework came into force.
RVPNL And SLDC Support Capacity-Based Methodology
Respondent Nos. 2 and 3, including Rajasthan Vidyut Prasaran Nigam Limited (RVPNL) and SLDC, also supported the levy. They submitted that Regulation 15 of the Open Access Regulations, 2016 clearly provides that transmission and wheeling charges shall be payable on the basis of contracted open access capacity or utilised open access capacity, whichever is higher.
According to them, the tariff regulations only determine the overall wheeling charges applicable for the network, whereas recovery from individual open access consumers must follow the Open Access Regulations.
APTEL Examines Whether Contract Can Override Regulations
The principal issue before APTEL was whether the contractual terms under the Wheeling and Banking Agreement could protect BSL Ltd. from application of the later Open Access Regulations, 2016. The Tribunal examined the relevant clause of the agreement, which stated that transmission and wheeling charges would be payable as per RERC order dated 23.01.2009 and amended from time to time.
APTEL observed that the expression “amended from time to time” clearly indicated that the parties had contemplated future regulatory changes. The Tribunal held that statutory regulations, being subordinate legislation, prevail over contractual provisions wherever there is inconsistency.
While relying upon the principle laid down by the Supreme Court in PTC India Ltd. v. Central Electricity Regulatory Commission, the Tribunal observed that regulations can make inroads into contractual arrangements. The Tribunal therefore rejected the argument that the earlier agreement protected the appellant from the revised methodology.
Change From Energy-Based To Capacity-Based Charges
A major point considered by APTEL was the change introduced by the 2016 Regulations. The Tribunal noted that under the earlier framework, wheeling charges were effectively determined on an energy basis.The earlier regulations permitted wheeling charges either as fixed charges based on capacity or charges based on energy wheeled. However, the Open Access Regulations, 2016 brought a clear shift by providing that charges would be payable on the basis of contracted capacity or utilised capacity, whichever was higher.
The Tribunal held that once the new regulatory framework came into force, the open access regime had to be governed by the 2016 Regulations.
APTEL Rejects Argument That Tariff Regulations Continue To Apply
BSL Ltd. had argued that the RERC Tariff Regulations, 2014 were not repealed by the Open Access Regulations, 2016 and therefore continued to govern wheeling charges.
The Tribunal rejected this contention.
APTEL observed that the earlier tariff regulations derived their relevance from the Open Access Regulations, 2004. Once the 2004 Regulations were repealed by the 2016 Regulations, the earlier regulatory foundation for determining open access wheeling charges could no longer continue.
The Tribunal noted that the Open Access Regulations, 2016 constituted a comprehensive framework dealing with eligibility, procedure, charges, metering, scheduling, settlement and dispute resolution relating to intra-state open access.
Final Decision
After considering the submissions of all parties, APTEL concluded that there was no merit in the arguments raised by BSL Ltd. The Tribunal dismissed Appeal No. 142 of 2021 and affirmed the order dated 23.04.2019 passed by the Rajasthan Electricity Regulatory Commission.
Impact Of The Judgment On Open Access Consumers
The judgment has significant implications for open access consumers across Rajasthan.
The ruling confirms that contractual arrangements entered into with distribution licensees cannot prevent application of subsequent regulatory changes framed by the State Commission. Consumers operating under open access arrangements will have to consider the prevailing regulatory framework while assessing their financial liabilities. The decision also reinforces the principle that electricity regulations framed by statutory commissions have overriding effect over inconsistent contractual provisions.
The APTEL judgment in M/s BSL Ltd. vs AVVNL & Ors. settles an important issue concerning calculation of wheeling charges for open access consumers. The Tribunal has upheld the regulatory authority of State Electricity Regulatory Commissions and clarified that subsequent regulations can modify the financial consequences of existing contractual arrangements. The decision highlights that while contractual agreements remain important, they operate within the framework of statutory regulations governing the electricity sector. For open access consumers, the ruling serves as a reminder that regulatory changes can significantly impact commercial arrangements and cost structures.
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