PTC moves SC against CERC over power trading

PTC India Ltd today moved the Supreme Court challenging the Central Electricity Regulatory Commission’s (CERC) jurisdiction to regulate cross-border power transactions.

A Bench headed by Chief Justice KG Balakrishnan extended time till March 20 to PTC India to comply with the CERC direction, which asked it to immediately renegotiate all its existing power purchase agreements (PPAs) with power utilities in the country.

PTC has challenged the Appellate Tribunal for Electricity’s order that confirmed CERC’s directions asking the power firm to enter into revised PPAs with utilities in the eastern region of the country by fixing the trading margin charges not exceeding 4 paise per kilowatt hour (kwh) as provided in the Trading Regulations of 2006.

The CERC had asked PTC to rectify its position immediately by entering into new PPAs. The Commission had passed the directions after it found PTC was importing electricity from Bhutan and selling it to power utilities in West Bengal, Bihar, Jharkhand, Orissa and Sikkim, among others, and was setting trading margin charges in the name of service charges at 5 paise per kwh in violation of the regulations.

PTC counsel Harish Salve and Amit Kapur alleged that the tribunal erred in extending the territorial and regulatory jurisdiction of the Commission in terms of Trading Margin Regulations to international trade culminating overseas and long-term trade, which were explicitly excluded.

According to the central government-owned entity, this transaction involved international trade in pursuance of the agreements signed between India and Bhutan and the same was not within the domain of the Commission.

“The tribunal had misunderstood, misconstrued and misdirected itself to conclude that CERC has the authority to institute and impose international policy-making decisions. It is noteworthy that policy making powers and international treaties are the sole domain of the central government as per Section 3 of the Electricity Act,” the petition stated.

While stating that power purchase from two projects in Bhutan was pursuant to the two bilateral power agreements between the two sovereign governments, PTC said that it was mandated to undertake power trading with the neighbouring countries like Nepal and Bhutan.

In February 2002, the power ministry had directed various authorities, including Power Grid Corporation of India, to facilitate power purchase from the Chukha and Kurichhu hydel power projects by PTC and also sell the same in the eastern region at a surcharge of 5 paise per unit, it added.