In a significant development, the Central Electricity Regulatory Commission (CERC) in an advisory to the Government of India and the Ministry of Power has advised not to proceed in framing rules. CERC has taken a strong objection to the Ministry of Power’s move to release draft rules, including Electricity (change in law, must run status, and other matters) Rules, 2020, Transmission System Planning, Development, Recovery of Inter-State Transmission Charges Rules, 2020 and Electricity (Late Payment Surcharge) Rules, 2020.
CERC, in its advisory issued on Thursday, has clearly said that it would, therefore, be in the larger interest of the sector that the central government and the central commission work in harmony by honouring respective jurisdictions carved out in the EA 2003. CERC said, while the first and third draft rules are on the website of the Ministry of Power, the second draft rule has isn’t. “It is requested that for greater transparency and probity, draft rules may not only be put on the website for wide publicity and soliciting responses of wider stakeholders, but the responses received may also be disclosed on the website for the stakeholders at large to appreciate the impact of such rules,” said CERC.
CERC’s former chairman Pramod Deo told the Free Press Journal, “CERC deserves to be complimented for sound and correct advice. For all practical purposes, the distribution of electricity falls in the domain of the state governments. The temptation to bypass them is understandable. If the desired amendments to the Electricity Act, 2003, are facing resistance from the states, why not achieve the desired results by deploying rulemaking powers?” He further said that the risk is such an approach will bog down the central government in endless litigation.
CERC said that a holistic reading of the 2003 Act leads to the conclusion that regulations can be made as long as two conditions are satisfied, namely, that they are consistent with the Act and they are made for carrying out the provisions of the Act. “The subjects covered under the draft rules (with regard to the transmission access, charges and losses) are covered under the substantive functions of the central commission (also state commissions) and satisfy the twin conditions as enumerated by the Supreme Court. Therefore, the central commission (also state commissions) has the jurisdiction to make regulations,” it noted.
On the other hand, VP Raja, former chairman, Maharashtra Electricity Regulatory Commission (MERC) said that governments are expected to follow both the letter and spirit of the Constitution and laws made. There cannot be any law ultra vires of the Constitution. Similarly, there cannot be any rules ultra vires of enabling provisions of the main act. “In the three draft rules recently published by the Ministry of Power, we are witnessing a worrying trend, namely, an attempt to take away powers from the regulatory commissions. Such trends were also noticed when the tariff policy was announced and when the draft Electricity (Amendment) Bill, 2020, was notified. We hope that more meticulous scrutiny of proposals take place within the system before they are finalised,” he opined.