In a recent Judgement dated 21 December 2021 in Appeal No. 69 of 2021: Saurya Urja Company of Rajasthan Limited (Saurya Urja) vs. Rajasthan Electricity Regulatory Commission (RERC) & Ors., the Appellate Tribunal for Electricity (APTEL) set aside RERC's Order dated 08 December 2020 in Petition No. 1783 of 2020: ACME Jodhpur Solar Power Private Limited & Anr. vs. Saurya Urja (ACME) & Anr., and clarified that:

  1. State Electricity Regulatory Commission (SERC) does not have the jurisdiction under Section 86(1)(f) of the Electricity Act, 2003 (Electricity Act) to adjudicate upon a dispute between the Solar Power Park Developer (SPPD) i.e., Saurya Urja and the Solar Power Developer/Generator (SPD) i.e., ACME, since the SPPD is neither a 'Generating Company' nor a 'Licensee' under the Electricity Act;

  2. as per the Guidelines for Development of Solar Parks (Guidelines) notified by Ministry of New and Renewable Energy (MNRE), SPPD has been entrusted with the development of the transmission network within the solar park as a captive/dedicated transmission system of the SPDs of the park and thus, is not a 'Transmission Licensee'; and

  3. as per the Implementation Support Agreement dated 03 January 2018 (Agreement) entered into between the SPPD and SPD (a) any dispute between the SPPD and the SPD is to be resolved through arbitration and (b) the SPPD is empowered to restrict excess generation by the SPD beyond the rated capacity and the SPD is mandated to forego the excess generation and reduce the output to the rated capacity. The said provisions of the Agreement are in addition to and not in conflict with the Electricity Act or the Rules/Regulations framed thereunder.

Brief Background

  • The SPD set up 2×100 MWac solar power projects under MNRE's National Solar Mission (NSM) Scheme and executed the Agreement with the SPPD, which is a Joint Venture Company between the Government of Rajasthan and IL&FS Energy Development Company Limited. The SPPD was incorporated with the objective to plan, develop and operate solar parks in the State of Rajasthan under the Guidelines. Saurya Urja was authorized as the SPPD by MNRE for obtaining and maintaining connectivity and long-term access in inter-state transmission system and to carry out other associated works for development of Bhadla-III Solar Park at Bhadla, Tehsil Bap, Jodhpur District, Rajasthan (Solar Park).
  • Eventually, the SPDs commissioned their projects and started generating and injecting power into the State Grid through the electrical grid commissioned by the SPPD. However, the SPPD on 15 January 2019 wrote to the SPDs regarding the over-injection of power into the grid, as informed by the Regional Load Despatch Centre (RLDC). Pursuant thereto, the SPPD by way of its e-mail 25 May 2019, once again wrote to the SPDs inter-alia stating that the peak load capacity recorded at 13:11 hrs on 25 May 2019 is higher than the rated capacity and asked the SPDs to reduce the power flow accordingly.
  • Being aggrieved by the e-mail issued by the SPPD, the SPDs approached RERC vide Petition No. 1783 of 2020 under Sections 86(1)(c), 86(1)(k) and 86(1)(e) of the Electricity Act inter-alia seeking directions to be issued to the SPPD for not obstructing the generation and evacuation of the actual instantaneous solar power upto 110% of the project's rated capacity. RERC vide its Order dated 08 December 2020 inter-alia (i) upheld its jurisdiction qua adjudication of a dispute between the SPPD and the SPD; (ii) directed the SPPD to not obstruct the SPD's evacuation of solar power upto 110% of the project's rated capacity; and (iii) laid down that if the power injected by the SPD creates any grid disturbance, the State Load Despatch Centre (SLDC) and/or the Distribution Company (Discom) is empowered to issue any direction to the SPD.
  • Thereafter, the aforesaid Order dated 08 December 2020 was challenged by the SPPD before the APTEL by way of Appeal No. 69 of 2021 on the grounds that (a) RERC does not have the jurisdiction under Section 86 of the Electricity Act to adjudicate upon a dispute between a SPPD and SPD as Section 86(1)(f) restricts the powers of RERC to adjudicate upon disputes between 'Licensees' and 'Generating Companies' and to refer any dispute for arbitration; and (b) SPPD, under the Agreement, is empowered to direct the SPD to maintain grid discipline within its Solar Park in case the output goes beyond the permissible limits. APTEL, pursuant to having undertaken a detailed analysis of the Agreement, Guidelines and Section 86(1)(f) of the Electricity Act, set aside RERC's Order in entirety by way of its afore-mentioned Judgement dated 21 December 2021.


While there is scope for a further Appeal from the Judgement before the Supreme Court, the Judgement assumes significance as it settles and defines the contours and scope of the jurisdiction of an SERC under Section 86(1)(f) of the Electricity Act in the context of a dispute between an SPPD and SPD. The Judgement clarifies that an SERC does not have the powers to adjudicate upon a dispute between an SPPD and an SPD under Section 86(1)(f) of the Electricity Act as an SPPD is neither a 'Licensee' nor a 'Generating Company' and even its transmission responsibility is limited to within the solar park. APTEL also laid down that any such dispute can only be resolved under the provisions of the Agreement executed by the parties in line with the Guidelines notified by MNRE.

The Judgement reiterates the well-settled legal principle that a contract is to be interpreted according to its purpose and thus, clarifies that by virtue of the Agreement, the SPPD is empowered to restrict the excess generation by the SPD beyond the rated capacity to prevent any damage to its transmission system due to over-injection by the SPD. However, the Judgement is silent on the aspect of interplay between an SPPD and the SLDC/RLDC, which is entrusted with the function to ensure integrated grid operations in the State/Region and issue backing-down instructions for grid security/safety of any equipment or personnel under the Electricity Act read with the Grid Code Regulations.

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