States' Jurisdiction Over Intra-State Open Access Confirmed by CERC in Jindal Steel Matter

Jurisdictional Boundaries: CERC Rules on Intra-State Open Access Disputes

In a significant order clarifying the limits of its own authority, the Central Electricity Regulatory Commission (CERC) has dismissed a petition filed by Jindal Steel Limited (JSL), ruling that questions regarding the grant of No Objection Certificates (NOC) for intra-state connectivity fall squarely under the remit of State Electricity Regulatory Commissions. The bench, led by Chairperson Jishnu Barua, held that the presence of an inter-state transactional element does not grant the Central Commission oversight over the specific intra-state operational requirements of local distribution licensees.

The Conflict: T-GNA and the 'Extraneous' Conditions

The dispute arose when JSL, which maintains connectivity to the intra-state transmission system of Odisha (OPTCL), sought a 'Standing Clearance' on the National Open Access Registry (NOAR) platform to facilitate short-term, inter-state power trading.

When JSL applied for the clearance for its Angul plant, the distribution licensee, TP Central Odisha Distribution Limited (TPCODL), conditioned its NOC on two demands which JSL described as "entirely unconnected": the formalization of a new 20 MVA power connection for its subsidiary, Jindal Steel Odisha Limited (JSOL), and an emergency power supply arrangement for its captive plant.

JSL argued before the CERC that the GNA Regulations, 2022, only permit refusal of Standing Clearance based on specific infrastructure or capacity constraints, and that importing discom-imposed commercial conditions into the NOAR framework was "ultra vires" and "coercive."

The Jurisdictional Debate

The proceedings turned into a battle over forum competence. TPCODL and the Odisha SLDC argued that because the Petitioner is a consumer connected to the state’s distribution network, the process is governed by the Odisha Electricity Regulatory Commission's (OERC) Open Access Regulations.

"The key determinant is delivery, end-user and consumption within the State grid," argued counsel for TPCODL, relying on the recent Supreme Court judgment in Ramayana Ispat (P) Ltd. v. State of Rajasthan . The Respondents maintained that the statutory scheme of the Electricity Act intended for State Commissions to retain control over intra-state network usage, regardless of whether the power is later utilized for inter-state trading.

Defining the Regulatory Nexus

The Petitioner attempted to rely on a clarification from the Central Electricity Authority (CEA) to argue that its plant and load configuration should be treated as a single integrated captive complex, thereby nullifying the need for the discom’s conditions. However, the Commission and other Respondents viewed this as a misapplication of advisory opinion.

The CERC bench noted that the GNA Regulations acknowledge host-state practices, including the requirement for distribution licensee consent, and that these regulations are not intended to override the regulatory oversight of the state authorities.

Key Observations

The Commission’s decision reaffirmed the legislative intent behind decentralized regulation in the power sector:

• "Section 79(1)(c) of the Act of 2003 defines the regulatory authority of the CERC over inter-state transmission of electricity. However, this provision does not strip State Commissions... of their jurisdiction over intra-state aspects of open access."
• "The key determinant is not the source of power but its delivery, end-user, and consumption within the [state's] intra-state grid."
• "Any dispute arising due to non-issuance of NOC by SLDC for use of intra-State transmission system/network... has to be brought before the State Commission."

Final Outcome: A Shift Toward State Oversight

By rejecting the petition, the CERC has served a clear directive to market participants: procedural requirements for intra-state grid utilization, even in the context of broader inter-state trade, remain within the domain of the state regulators. JSL’s attempt to bypass the local regulatory mechanism in favor of a central authority was deemed untenable, reinforcing the role of State Electricity Regulatory Commissions as the primary adjudicators for disputes involving local distribution licensees and embedded industrial consumers.

The Petitioner is now at liberty to raise these grievances before the OERC, which remains the competent forum to interpret the state's grid code and the reasonableness of the discom's operational conditions.