Supreme Court bars tariff recovery for unused power service
Power tariff teams cannot recover plant costs after supply stops
Change
India’s Supreme Court restored the Delhi Electricity Regulatory Commission order denying tariff recovery for the Rithala plant after electricity supply stopped in March 2018.
Why it matters
The ruling ties tariff recovery to actual service delivery rather than allowing full capital-cost recovery after supply ends. Distribution utilities and power generators must treat consumer-interest protection as a binding constraint in tariff claims where the underlying service is no longer provided.
Implications
- — Electricity distribution-utility tariff teams must exclude Rithala plant charges from consumer tariff recovery after March 2018 — charging consumers for a plant that stopped supplying electricity conflicts with the Supreme Court ruling restoring the DERC order.
- — Power generator and distribution regulatory teams must reassess depreciation-based capital-cost recovery claims for plants that have stopped supply — tariff recovery cannot be treated as a purely mathematical exercise when consumers no longer receive the service.
- — Electricity regulatory and commercial teams must align tariff petitions with the consumer-interest test under the Electricity Act, 2003 — claims that recover costs without service delivery face rejection or reversal.
Who is affected
- — Electricity distribution-utility tariff teams
- — Power generator regulatory teams
- — Electricity regulatory and commercial teams