The Kerala State Electricity Board (KESB) had challenged the recently passed CERC regulations 2020 contending that the regulations are discriminatory to the distribution licensees in the south zone and against the operation of the National Tariff Policy and the Electricity Act, 2003 under which they were passed.
The new rules brought down the percentage of shared charges from 80 to 20 and also changed the criteria for charges from geographical location to long-term access.
The recommendations of the Committee headed by A S Bakshi were also contended to be malafide. However, the commission submitted it was the subsequent Jha committee report that was ultimately accepted. Further, the change was of transmission shared charges and not of tariffs.
Justice A K Jayasankaran Nambiar of the Kerala High Court, after hearing both the parties, upheld that the court could not interfere in a policy decision unless it was ultra vires of the statute which gives the commission the power to pass the impugned regulations. The Bakshi report was merely a set of recommendations and hence could not be set aside. There was no fixed ratio mentioned in the statute and since the utility criteria has been considered in the shared charges, the regulations are not ultra vires.