CERC Directs Power Generator to State Commission in Transmission Fee Dispute with
MSETCL
New Delhi
– The Central Electricity Regulatory Commission (CERC), in a significant order dated June 20, 2025, has ruled that the
Maharashtra
Electricity Regulatory Commission (
MERC
) is the appropriate forum to adjudicate a dispute over transmission charges for power supplied from a
Maharashtra
-based plant to
Indian Railways
for use in other states. The CERC bench, comprising Chairperson Shri
Jishnu Barua
and Members Shri Ramesh Babu V. and Shri Harish Dudani, dismissed the petition filed by
Ratnagiri Gas
and Power Private Limited (
RGPPL
), holding that the charges for using the intra-state transmission system fall under
MERC
's jurisdiction in the absence of a specific 'contract path' agreement.
Background of the Dispute
The case,
Petition No. 344/MP/2020
, was initiated by
RGPPL
, which operates a gas-based power plant in
Maharashtra
. Following a Ministry of Power allocation,
RGPPL
supplies 540 MW of power to
Indian Railways
, out of which 330 MW is transmitted for use outside
Maharashtra
to various railway zones.
RGPPL
's grievance was against the
Maharashtra
State Electricity Transmission Company Limited (
MSETCL
), which was levying transmission charges determined by
MERC
.
RGPPL
contended that since the 330 MW of power was for inter-state use, the charges should be based on a 'contract path' methodology previously approved by the Western Regional Power Committee (WRPC) in 2010. This method,
RGPPL
argued, resulted in a much lower rate of ₹0.73 Lakhs/MW/month and had been applied in similar cases involving power supply to Goa, Daman & Diu, and Dadra & Nagar Haveli.
RGPPL
sought a refund for the excess charges levied since April 2017.
Arguments of the Parties
Petitioner (
RGPPL
):
RGPPL
's counsel, Ms.
Swapna Seshadri
, argued that the use of
MSETCL
's lines (Dabhol-Nagothane-Padghe) for inter-state power supply constituted an "intervening transmission system," placing the dispute squarely within CERC's jurisdiction under Section 79 of the Electricity Act, 2003. They asserted that the financial burden of the high charges ultimately fell on
RGPPL
, as
Indian Railways
would deduct these amounts from their payments. They heavily relied on a prior CERC order (in Petitions 153 & 154/MP/2018) where the 'contract path' method was upheld for other entities.
Respondents (
MSETCL
and MSEDCL):
MSETCL
argued that it had no direct agreement with
RGPPL
and that its contract was with
Indian Railways
. It contended that the Long-Term Open Access (LTOA) granted to
Indian Railways
was for the entire
Maharashtra
intra-state network, not a specific, identifiable 'contract path.' Therefore, the charges were correctly calculated as per
MERC
's tariff orders.
Maharashtra
State Electricity Distribution Company Limited (MSEDCL) intervened, stating that any reduction in charges for
Indian Railways
would unfairly increase the tariff burden on other state consumers, as MSEDCL pays nearly 86% of the state's transmission costs.
Legal Principles and Court's Analysis
The Commission meticulously distinguished the present case from the precedent cited by
RGPPL
. The central issue boiled down to the nature of the agreements governing the power transmission.
The CERC noted:
"The reliance of the Petitioner on the Order dated 04.02.2021 in Petition 153/MP/2018 and 154/MP/2018 is misplaced since in the referred cases, there was an express
BPTA
between
MSETCL
and the other party identifying the contract path."
In contrast, the Commission found that in the current case: * The Long Term Open Access (LTOA) agreements and the Bulk Power Transmission Agreement (
BPTA
) between
MSETCL
and
Indian Railways
did not specify any 'contract path.' * The agreements explicitly referenced the applicability of
MERC
's regulations and tariff orders for determining transmission charges. * The Power Purchase Agreement (PPA) between
RGPPL
and
Indian Railways
placed the responsibility of obtaining open access and paying transmission charges on the Railways, without stipulating a specific charging methodology.
The judgment clarified:
“We are of the considered view that since
Indian Railways
has obtained LTOA for drawl of power from
RGPPL
power plant and the
BPTA
entered into between
Indian Railways
and
MSETCL
does not specify any contract path or does not contain any reference to WRPC letter dated 17.08.2010, the contention of Petitioner to levy charges for intra-State transmission system based on WRPC letter dated 17.08.2010 does not hold any water.”
Final Decision and Implications
Concluding its analysis, the CERC held that
Indian Railways
is a Transmission System User (TSU) within
Maharashtra
's network and is liable to pay charges as determined by
MERC
. The Commission directed
RGPPL
to approach the appropriate state body for any grievance.
"Therefore, if the petitioner has any issue with the determination of transmission charges for use of the Intra State Transmission System (InSTS) by the
Indian Railways
in terms of LTOAs, in that case, the
Maharashtra
Electricity Regulatory Commission (
MERC
) is the appropriate Commission to adjudicate upon the matter."
The petition was disposed of accordingly. This ruling reinforces the jurisdictional boundaries between Central and State electricity commissions, emphasizing that the terms of contractual agreements like LTOAs and
BPTA
s are paramount in determining the applicable regulatory authority and tariff framework.
