The Appellate Tribunal for Electricity (APTEL) has held that the Punjab State Electricity Regulatory Commission (PSERC) has the legal authority to issue directions to the Punjab Energy Development Agency (PEDA) and can hear disputes involving PEDA when such disputes are closely tied to power procurement processes or tariff-related matters.

This authority remains valid even though PEDA is neither a generating company nor a distribution licensee.

Background

The judgment arises from a batch of appeals involving several renewable energy developers, PEDA, PSERC, and the Punjab State Power Corporation (PSPCL).

One of the central cases involved the Terkiana Hydroelectric Power Project, developed by Atlantic Power. The company had entered into agreements with PEDA and PSPCL to develop and operate the hydro project.

Following completion, local objections to water diversion led to operational changes, requiring the construction of an escape channel. The developer sought compensation for this construction and the tariff re-determination.

PSERC denied the tariff revision but allowed recovery of escape channel costs from PEDA’s energy share. Atlantic Power challenged the tariff decision, while PEDA appealed the directive to refund its share of the costs.

Other cases involved multiple developers, all of whom had faced delays in commissioning their solar projects. They approached the Commission for extensions to their scheduled commercial operation dates and to prevent encashment of their performance bank guarantees by PEDA.

The Commission granted partial relief, ordering a limited extension of timelines and partial return of bank guarantees. PEDA contested these orders, arguing PSERC had no jurisdiction to issue directions to it.

In each of these appeals, the central legal challenge revolved around whether PEDA, being a non-licensee and non-generator, could be directed or bound by the Commission’s orders issued. The petitioner argued that PEDA was not subject to regulatory oversight under the Act. It claimed the regulator’s actions violated jurisdictional limits by intervening in purely contractual matters between PEDA and project developers. It cited Supreme Court judgments to argue that only disputes between licensees and generators could be adjudicated.

On the other hand, the Commission and the renewable energy developers maintained that since PEDA played a critical role in project implementation, any dispute that directly impacted tariffs, power procurement, or commercial operation dates fell within the Commission’s regulatory mandate. They argued that agreements signed with PEDA were not independent of the power purchase agreements with PSPCL and that relief under one could not be delinked from obligations under the other. The Commission insisted that the power to regulate must be interpreted broadly, allowing intervention where necessary to protect sectoral integrity and the interests of consumers.

Commission’s Analysis

APTEL highlighted that the Electricity Act, 2003, was designed to consolidate electricity laws and promote competition, transparency, and consumer protection in the sector. It emphasized that the State Commission is empowered to regulate the electricity procurement process of distribution licensees, which includes oversight of all interconnected entities and agreements that influence tariff and power supply.

The Tribunal acknowledged that, although PEDA is neither a generator nor a licensee, its role in awarding projects and overseeing implementation agreements has a direct impact on electricity procurement and tariff outcomes. The Commission found that in cases where implementation agreements and PPAs are interlinked, disputes involving PEDA affect tariff, commercial operation, and power availability. In such circumstances, it is not only permissible but necessary for the Commission to issue directions to PEDA.

APTEL supported this conclusion by referencing multiple judicial precedents. It cited the Supreme Court’s observation in the Tata Power judgment that while generation is de-licensed, procurement is regulated and subject to Commission approval.

It also referred to the Gujarat Urja Vikas Nigam and Solar Semiconductor cases, reaffirming that the regulator’s role extends to ensuring the viability and fairness of power procurement arrangements.

The Tribunal cited its own recent decisions and those of the Supreme Court in the Gagan Narang case, which held that entities that affect the procurement process can be brought under regulatory purview, even if they are not traditional licensees or generators.

APTEL recently overturned orders by the Tamil Nadu Electricity Regulatory Commission’s that had imposed increased charges on wind power producers.

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