Consumer cannot be compelled to purchase electricity only from DISCOMS: APTEL

In a significant order, the Appellate Tribunal for Electricity (APTEL) recently held that a consumer cannot be compelled to purchase electricity only from distribution companies (DISCOMS) [Srikalahasti Pipes Limited v. Andhra Pradesh State Power Distribution Company Limited & Ors].

It further held that it is a statutory right of every consumer to procure electricity from either the DISCOMS or from the open market, and that under no circumstances can the right to open access of any consumer be curtailed.

The Bench headed by APTEL Chairperson Justice Manjula Chellur was hearing a reference made on account of divergent opinions of a Technical Member and a Judicial Member.

The Andhra Pradesh Electricity Regulatory Commission (APERC) in the tariff order for the year 2020-21 imposed a blanket ban upon ferro alloys industries for procuring power through open access. The Andhra Pradesh Electricity Regulatory Commission subsequently approved the same in an order passed last year.

The appellant company thus approached the APTEL challenging this order, claiming that the decision was one creating unreasonable differentiation within a class.

It was further contended that the Commission ignored and failed to appreciate the non-discriminatory open access to the power grid, which was introduced by virtue of the Electricity Act, 2003, introduced with a view to increasing competition in the electricity market, so as to enhance competency and efficiency.

The order stated,

"It is nothing but discrimination. Allowing open access to some industries and disallowing such benefit to other similarly placed industries definitely amounts to discrimination, which is against the spirit of Electricity Act of 2003. Therefore, the open access in terms of Section 42 read with the definition of ‘open access’ under Section 2(47) explicitly goes to show that there cannot be any compulsion or restriction which comes in the way of right to have open access."

Further,

"The State Commission seems to have acted only keeping in its mind the interest of DISCOM at the cost of the consumer by obstructing the right of the consumer to enjoy the open access, which is non-discriminatory under the Act..."

It thus concluded that there cannot be a compulsion on the appellant not to procure power through open access, and that compelling the appellant to purchase power from the DISCOM would be against the philosophy of the 2003 Act.

The appellant was represented by Senior Advocate Sajan Poovayya who was briefed by Advocates Sanjay Jhanwar, Prakul Khurana, Ankit Sareen and Rajat Sharma of Chir Amrit Legal LLP.

The Andhra Pradesh State Power Distribution Company Limited was represented by Advocates Ardhendumauli Kumar Prasad, Ushasri Gavarraju and Ashish Madan.

The Andhra Pradesh Electricity Regulatory Commission was represented by Advocates Sridhar Potaraju, Shiwani Tushir and Aayush Shankar.

[Read order]