M/s BSL Ltd., vs Ajmer Vidyut Vitran Nigam Ltd. on 11 August 2026

JUDGEMENT

PER HON’BLE MR. AJAY TALEGAONKAR, TECHNICAL MEMBER

1. The present Appeal has been filed by M/s. BSL Limited (“Appellant”) challenging the Impugned Order passed by Rajasthan Electricity Regulatory Commission (“RERC”/ “Respondent No. 4”/ “State Commission”) order dated 23.04.2019 in Petition No. 1393/ 2018 (“Impugned Order”). Description of the Parties

2. The Appellant, M/s. BSL Limited, is a company incorporated under the Companies Act, 1956. It is a High Tension (HT) consumer of Respondent No.1, Ajmer Vidyut Vitran Nigam Limited (AVVNL) having a contracted demand of 6460 KVA.

3. Respondent No. 1, AVVNL is the distribution licensee responsible for supply of electricity in its licensed area and is the entity which levied the disputed wheeling charges.

4. Respondent No. 2, State Power Committee (SPC) is the Power Committee set up under grid code specified by the State Commission.

5. Respondent No. 3, Rajasthan Vidyut Prasaran Nigam Limited (RVPNL)/ State Load Despatch Centre (SLDC) is the State transmission utility and the nodal agency responsible for operation of the State grid and administration of open access.

6. Respondent No. 4, Rajasthan Electricity Regulatory Commission (RERC) is the State Electricity Regulatory Commission constituted under the Electricity Act, 2003. Factual Matrix of the Case

7. The State Commission had, from time to time, determined wheeling charges under its tariff orders dated 19.09.2006, 31.03.2010 and 31.03.2011 and subsequently notified the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2009 and 2014 as well as the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016.

8. The Appellant entered into a Wheeling and Banking Agreement dated 19.03.2013 with Inox Renewables Limited (developer) and AVVNL followed by a Wheeling Agreement dated 20.03.2013 with Rajasthan Rajya Vidyut Prasaran Nigam Limited and Inox Renewables Limited for wheeling of electricity generated from its captive wind power project.

9. In February and March 2018, the Appellant disputed the wheeling charges levied by AVVNL and submitted representations alleging excess recovery.

10. AVVNL, by notice dated 22.03.2018 stated that the wheeling charges had been levied in accordance with Regulation 15 of the RERC Open Access Regulations, 2016. Aggrieved thereby, the Appellant invoked the dispute resolution mechanism under the Open Access Regulations.

11. The Appellant’s grievance was first rejected by the SLDC through communication dated 01.06.2018. Thereafter, the Appellant preferred the matter before the State Power Committee, which, by communication dated 18.09.2018, upheld the levy of wheeling charges by AVVNL.

12. Aggrieved by the decisions of the SLDC and the State Power Committee, the Appellant filed Petition No. 1393 of 2018 before the RERC challenging the recovery of wheeling charges under Regulation 15 of the RERC Open Access Regulations, 2016.

13. By the Impugned Order dated 23.04.2019, RERC dismissed the petition and upheld the methodology adopted by AVVNL for levy of wheeling charges. Aggrieved thereby, the Appellant has preferred the present Appeal.

14. The Appellant has prayed for the following relief before us:

“i. Set aside the impugned order dated 23.04.2019 passed by the Ld. Rajasthan Electricity Regulatory Commission in OP No. 1393/2018; ii. Direct the Respondent Discom to levy wheeling charges on actual injection of energy as per the RERC Tariff Regulations, 2014; iii. Any other relief as this Hon’ble Tribunal deems fit and proper.”

Submissions of the Appellant

15. The Appellant submitted that the RERC erred in applying the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016 (“OA Regulations, 2016”) to the Appellant despite the Wheeling and Banking Agreement (WBA) dated 19.03.2013 expressly providing that wheeling charges would be governed by the RERC Order dated 23.01.2009 as amended from time to time.

16. The Impugned Order failed to recognize that the Tariff Regulations, 2014 were never repealed or superseded by the OA Regulations, 2016. Regulation 32 of the OA Regulations, 2016 repeals only the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2004 (“OA Regulations, 2004”) and not the Tariff Regulations, 2014. Consequently, the unilateral application of the OA Regulations, 2016 to the Appellant is unsustainable.

17. The Appellant submitted that the wheeling charges have been wrongly computed on the basis of contracted capacity by presuming continuous 24-hour consumption throughout the month whereas the Appellant consumes electricity only for limited hours on certain days and not at all on several days. Such computation is contrary to the WBA and the applicable RERC Regulations.

18. The impugned methodology increased the Appellant’s wheeling charges from ₹ 2,82,245/- (calculated at 11 paise/kWh for FY 2016-17) to ₹ 19,27,200/- imposing an additional liability of ₹ 16,44,954/-. Such levy is arbitrary, contrary to the applicable regulations and violative of Article 19(1)(g) of the Constitution of India.

19. RERC erred in law by failing to harmoniously construe the Tariff Regulations, 2014 and the OA Regulations, 2016 thereby disregarding the settled principle of harmonious construction and wrongly subjecting the Appellant to the OA Regulations, 2016.

Submissions of the Respondent No. 1- AVVNL

20. AVVNL submitted that the Appellant is an Open Access consumer and upon coming into force of the OA Regulations, 2016, wheeling charges became payable on the basis of the Open Access capacity contracted or utilized, whichever is higher and not on the basis of actual energy wheeled as was the

practice under the OA Regulations, 2004. The RERC, by clarification dated 16.12.2016 also confirmed this interpretation.

21. The Wheeling and Banking Agreement binds the Appellant to future regulatory amendments; Clause 11 (Change of Law) of the Wheeling and Banking Agreement provides that any changes in applicable Acts, Policies, Rules, Regulations or Regulatory Directions issued from time to time shall be binding on all parties. Therefore, the Appellant is bound by the OA Regulations, 2016 which superseded the OA Regulations, 2004.

22. Regulation 15(1) of OA Regulations 2016 stipulates that transmission and wheeling charges are payable on the basis of Open Access capacity contracted or utilized, whichever is higher. Since Open Access is granted in terms of capacity and not actual energy consumption, the wheeling charges on a capacity basis are rightly levied. The Tariff Regulations merely prescribe the applicable rate (Rs. /kWh) and do not alter the basis of computation prescribed under the OA Regulations, 2016.

23. Regulation 32 of the OA Regulations, 2016 repealed the OA Regulations, 2004. Accordingly, when read together with Clause 11 of the WBA and Regulation 15, the only applicable framework governing the Appellant is the OA Regulations, 2016. Therefore, billing of wheeling charges under the OA Regulations, 2016 is lawful and valid.

24. Annexure-3 (Part-IV General), Clause 29 of the Procedure for Grant of Open Access under the OA Regulations, 2016 specifically provides that wheeling charges shall be billed on the basis of Open Access capacity contracted or utilized, whichever is higher thereby removing any ambiguity regarding the method of computation.

25. The State Commission had already decided the same issue in its order dated 13.12.2016 in the case of M/s. Shree Krishna Rolling Mills (Jaipur) Ltd. and the impugned order dated 23.04.2019 applied the same principle to six consumers including the Appellant.

26. Since the Appellant had agreed to be governed by the applicable Rules and Regulations as amended from time to time and the wheeling charges were levied strictly in accordance with the OA Regulations, 2016, the appeal is liable to be dismissed.

Submissions of the Respondent Nos. 2 and 3

27. Respondent Nos. 2 and 3 submitted that the Appellant is an Open Access consumer and is governed by the OA Regulations, 2016. Regulation 15 expressly mandates that transmission and wheeling charges are payable on the basis of the contracted open access capacity or the utilized open access capacity, whichever is higher, and therefore the Appellant cannot seek levy of wheeling charges on any other basis.

28. The Tariff Regulations are relevant only for determination of wheeling charges for the State as a whole, whereas recovery of charges from individual Open Access consumers is governed solely by OA Regulations, 2016. Consequently, the Appellant’s reliance on the Tariff Regulations is misplaced.

29. Open Access is granted on the basis of sanctioned capacity and the distribution system is reserved accordingly. Since capacity is allocated irrespective of actual energy drawal, wheeling charges must necessarily be levied on a capacity basis and not on actual energy wheeled or injected as claimed by the Appellant.

30. Clause 29 of the Standard Agreement executed under the Open Access Regulations expressly provides that wheeling charges shall be payable on the

basis of the contracted open access capacity or the utilized capacity, whichever is higher. The Appellant is bound by the terms of the agreement.

31. Respondent Nos. 2 and 3 further submitted that RERC had settled the law in this regard in the matters being Petition No. 604/16, 848/16 and 868/16 filed by M/s. Shree Krishna Roiling Mills (Jaipur) Ltd., M/s. AMP Industries Ltd., Alwar, M/s. Shiva Steelage Pvt. Ltd., Jaipur respectively whereby RERC in its order dated 13.12.2016 has categorically held that the wheeling charges have to be levied under OA Regulations on contracted capacity or energy utilized by an open access consumer, whichever is higher and not on any other basis.

32. While the Tariff Regulations prescribe the methodology for determination of wheeling charges for the distribution system, the actual recovery from an Open Access consumer must be in accordance with the Open Access Regulations. The Commission rightly held that overall network utilization is relevant for tariff determination whereas individual billing must follow the Open Access Regulations.

Our Analysis and Conclusions

33. We note that the main grievance of the Appellant is application of wheeling charges on the basis of capacity post implementation of OA Regulations, 2016, which was earlier on the basis of energy. The contentions of the Appellant essentially contain two limbs: i. The wheeling agreement provided for application of the wheeling charges in accordance with RERC orders issued from time to time and the same cannot be altered later, and ii. The OA Regulations, 2016 do not repeal of the RERC Tariff Regulations, 2014 and therefore, it is entitled for continued governance under the latter.

34. The relevant extract of the Wheeling and Banking Agreement (WBA) is reproduced below:

“5 (A) Transmission & Wheeling of Energy Keeping in view the Grid Policy and amended from time to time the Power Produce shall be free to use the power for their captive consumption at their unit BSL LIMITED BHILWARA after paying the transmission & wheeling charges and losses as per RERC order dated 23.01.2009 and amended from time to time.”

35. We note that the aforesaid clause of the WBA anchors the payment of transmission and wheeling charges to the RERC order dated 23.01.2009. Although the aforesaid clause refers to “RERC order dated 23.01.2009”, it is, in fact, the RERC Regulations, namely, RERC (Terms and Conditions for Determination of Tariff) Regulations, 2009 (“RERC Tariff Regulations, 2009”) issued on 23.01.2009. Likewise, the expression “and amended from time to time” is evidently intended to mean “as amended from time to time”. The clause, therefore, unmistakably contemplates the application of the relevant Regulations, as amended from time to time.

36. The RERC Tariff Regulations, 2009 are on the record. From Regulation 108 of these regulations (extracted in next paragraph of this judgment), we note that provision in RERC Tariff Regulations, 2009 regarding wheeling charges for open access customers was traceable to provision in OA Regulations, 2004. Though OA Regulations, 2004 are not on record, they are available in public domain (downloadable from webpage https://rerc.rajasthan.gov.in/rerc-user- files/regulations., last accessed on 05.08.2026). We note that OA Regulations, 2004 were the first set of regulations on open access in intra-state transmission and distribution system in Rajasthan and were issued by RERC in May 2004. So far as wheeling charges are concerned, the relevant provision in the aforesaid Regulations was as under: “14. Charges for open access

(1) The Transmission charges or wheeling charges for use of the Transmission System of the Transmission Licensee or the distribution system of a distribution licensee shall be regulated as under:

(a) Transmission charges and wheeling charges payable by an open access customer shall be determined by the Commission in terms of the regulations framed by the Commission for determination of tariff. ….. …..”

37. It may be seen from the above extract that though OA Regulations, 2004 dealt with practically every aspect of open access, it left the issue of determination of wheeling charges applicable to open access customers on another set of Regulations namely terms and conditions of tariff. Accordingly, the same was covered in the RERC Tariff Regulations, 2009. The relevant part of the Regulations relating to payment of transmission and wheeling charges as contained in the RERC Tariff Regulations, 2009 is extracted below:

“108. Applicability …

(2) These Regulations shall also apply in determining tariff payable for wheeling of electricity by a Distribution System User who has been allowed open access to the distribution system of a Distribution Licensee in accordance with the Rajasthan Electricity Regulatory Commission (Open Access) Regulations, 2004:”

“128. Wheeling charges

(1) …..

…. …..

Payment of wheeling charges:

Wheeling charges may consist of the following or any one or combination thereof:

(a) Fixed charge in Rs. per month per KW of contracted power.

(b) A charge in Rs. Per kWh of energy wheeled separately for

(i) Wire business

(ii) Installation, operation and maintenance of meters, metering system and any other equipment at consumer’s premises.

(iii) Billing & collection of payment

(iv) Consumer services.

(c) Connectivity fee.

(d) Reactive energy charge / incentive

……”

38. It is evident from the above extract that the RERC Tariff Regulations, 2009 also governed open access customers in respect of wheeling charges. These Regulations provided that wheeling charges could be levied as a fixed charge based on capacity, or as an energy-based charge, or as a combination of the two. Thereafter, based on the aforesaid Regulations, RERC issued orders dated 31.03.2010 and later order dated 31.03.2011, inter-alia covering determination of wheeling charges. Both these orders determined wheeling charges on Rs. per kWh basis. This clearly indicates that the wheeling charges were actually determined by RERC based on energy wheeled and not capacity.

39. The Subsequent regulations, namely RERC Tariff Regulations, 2014 replaced RERC Tariff Regulations, 2009. The provisions of the RERC Tariff Regulations 2014 governing wheeling charges were materially identical with the corresponding provisions contained in the RERC Tariff Regulations, 2009.

40. Subsequently, RERC framed new regulations relating to open access, namely OA Regulations, 2016 with express repeal of OA Regulations, 2004 (regulation 32 of the OA Regulations, 2016). Unlike OA Regulations, 2004, the OA Regulations, 2016 covered the issue of wheeling charges also. The relevant extract of these Regulations is reproduced below:

“15. Charges for Open Access

(1) The open access customer shall pay the transmission charges and wheeling charges as determined from time to time. Provided that the transmission and wheeling charges shall be payable on the basis of open access capacity contracted or open access capacity utilized whichever is higher. The excess open access capacity utilized up to 5% of open access capacity allocation occurring to the extent of two time blocks of 15 minutes each during a month shall be exempted.”

41. It may be seen from the above extract that there is clear shift in the approach relating to basis of wheeling charges; the OA Regulations, 2016 stipulated wheeling charges on the basis of capacity contracted or actual capacity utilized, whichever is higher.

42. In this background, we proceed to examine the first limb of the Appellant’s argument that the subsequent Regulations could not alter the basis for the levy of wheeling charges as stipulated in the WBA. We find no merit in this contention. It is well settled that statutory regulations, being subordinate legislation, prevail over contractual stipulations to the extent of any inconsistency and, therefore, make inroads into the terms of a contract (PTC India Ltd. v. Central Electricity Regulatory Commission, (2010) 4 SCC 603). The OA Regulations, 2016 expressly stipulated that wheeling charges were to be determined on the basis of capacity and would, therefore, ordinarily prevail over any contrary provision contained in the WBA. Moreover, as we have analysed in the earlier part of this Judgement, the WBA itself contemplates the application of the Regulations, as amended from time to time.

43. Now coming to the second limb of the argument of the Appellant, it is understandable that the Appellant desires to continue to be governed under RERC Tariff Regulations, 2014 as the wheeling charges payable by it would increase under OA Regulations, 2016 mainly due to shift from energy-based application to capacity-based application. However, this desire has to be supported by legally tenable argument. We now proceed to examine merits in this contention of the Appellant that the OA Regulations do not explicitly repeal RERC Tariff Regulations, 2014 and hence they continue to apply to them specially since they were mentioned in WBA.

44. A crucial aspect that needs attention is that both the RERC Tariff Regulations, 2009 and the RERC Tariff Regulations, 2014 were framed to lay

down the terms and conditions for determination of tariff based on cost-of- service model but derived the authority to prescribe the methodology for determination of wheeling charges for open access customers from the OA Regulations 2004 (Regulation 14 (1) (a) extracted in paragraph 36 of this judgment). Therefore, it is not surprising that only one or two sub-regulations dealing with determination of wheeling charges for open access were related to open access in the RERC Tariff Regulations, 2009 and the RERC Tariff Regulations, 2014. These regulations did not deal with procedural aspects about who is eligible for open access, various categories of open access, the method of applying for open access etc. On the other hand, the OA Regulations, 2016 is a complete code on intra-State open access because it comprehensively governs the entire field viz. eligibility, charges, procedures, priority, curtailment, metering, scheduling, settlement, dispute resolution and specifically determination of wheeling charges, which was not part of OA Regulations, 2004.

45. The Appellant itself has admitted that OA Regulations, 2016 explicitly repealed OA Regulations, 2004. This is amply clear from the Regulation 32: “32. Repeal and Savings

(1) On commencement of these Regulations, the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2004 shall stand repealed. Provided that the application for grant of open access under these Regulations may be made as per the procedure issued under the old Regulations till new procedure is issued under the provisions of these Regulations.

(2) On commencement of these Regulations, any reference to the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2004 in any of the Regulations, standards, codes or procedures of the Rajasthan Electricity Regulatory Commission shall be deemed to be replaced by Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016. …. …….”

46. In view of the above, we are unable to accept the contention that the mere continuation of the RERC Tariff Regulations, 2014 would preserve their application for determining the basis of wheeling charges payable by an open access consumer. The RERC Tariff Regulations, 2009 and 2014 derived their relevance to open access wheeling charges from the framework contained in the OA Regulations, 2004 which specifically contemplated that the transmission and wheeling charges payable by an open access customer would be determined in terms of the regulations framed by the Commission for terms and conditions of tariff.

47. However, with the commencement of the OA Regulations, 2016, the OA Regulations, 2004 stood expressly repealed under Regulation 32, and Regulation 32(2) further provided that every reference to the OA Regulations, 2004 in the regulations, standards, codes or procedures of the Commission would be deemed to be replaced by a reference to the OA Regulations, 2016. Consequently, the legal basis under which the 2009 and 2014 Tariff Regulations operated in the field of open access wheeling charges could no longer be invoked to determine the governing regime for open access after the OA Regulations, 2016 came into force.

48. The OA Regulations, 2016, being the subsequent and comprehensive regulatory framework governing intra-State open access, expressly and specifically provides under Regulation 15 the basis on which transmission and wheeling charges are payable, namely, the open access capacity contracted or the open access capacity utilized, whichever is higher. Thus, while the Tariff Regulations, 2009 and 2014 may not have been expressly repealed by the OA Regulations, 2016, they cannot, after the repeal of the OA Regulations, 2004, be relied upon as the source of authority for determining the basis of wheeling charges payable under the open access regime which is specifically governed by the OA Regulations, 2016.

49. In view of the foregoing analysis, we have come to the conclusion that there is no merit in the arguments put forward by the Appellant assailing the Impugned Order.

ORDER

For the foregoing reasons as stated above, we have come to the conclusion that the Appeal No. 142 of 2021 is devoid of merit and is accordingly dismissed. As a corollary, the Impugned Order dated 23.04.2019 passed by the Rajasthan Electricity Regulatory Commission in Petition No. 1393/2018 is hereby affirmed.

PRONOUNCED IN THE OPEN COURT ON THIS 11th DAY OF AUGUST, 2026.

(Ajay Talegaonkar) Technical Member (Virender Bhat) Judicial Member

REPORTABLE / NON-REPORTABLE kns/mg/mkj/kks