Open-access wheeling charges must be based on contracted or utilized capacity, whichever is higher.

M/s BSL Ltd., an HT consumer of Ajmer Vidyut Vitran Nigam Ltd. with a contracted demand of 6,460 KVA, entered into a Wheeling and Banking Agreement dated 19 March 2013 for wheeling electricity from its captive wind power project.

The agreement provided for payment of transmission and wheeling charges in accordance with the RERC order dated 23 January 2009, as amended from time to time.

In February–March 2018, the Appellant disputed AVVNL’s wheeling-charge computation, contending that charges should be levied on the basis of actual energy wheeled rather than contracted capacity.

AVVNL rejected the objection and relied on Regulation 15 of the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016 (“OA Regulations, 2016”).

The SLDC and State Power Committee upheld the levy.

The Appellant’s petition before the Rajasthan Electricity Regulatory Commission (“RERC”) was dismissed on 23 April 2019 in Petition No. 1393/2018.

RERC upheld the methodology of levying wheeling charges on the basis of open-access capacity contracted or utilised, whichever was higher.

The Appellant thereafter filed the present appeal seeking, inter alia, application of wheeling charges based on actual energy injection under the RERC Tariff Regulations, 2014.

Whether the Appellant’s Wheeling and Banking Agreement required wheeling charges to continue to be computed on an energy basis under the RERC Tariff Regulations, 2009/2014, notwithstanding the subsequent OA Regulations, 2016?

Whether the OA Regulations, 2016, which expressly repealed the OA Regulations, 2004 but did not expressly repeal the RERC Tariff Regulations, 2014, nevertheless governed the basis for recovery of wheeling charges from the Appellant?

Whether wheeling charges were lawfully leviable on the basis of open-access capacity contracted or utilised, whichever was higher, rather than on the basis of actual energy wheeled?

The Court applied Regulation 15(1) of the OA Regulations, 2016, which requires transmission and wheeling charges to be paid on the basis of open-access capacity contracted or open-access capacity utilised, whichever is higher, subject to the prescribed exemption.

It considered Regulation 32 of the same Regulations, which expressly repealed the OA Regulations, 2004 and replaced references to those Regulations with references to the OA Regulations, 2016.

The Court also examined the RERC Tariff Regulations, 2009 and 2014, under which wheeling charges for open-access consumers had previously operated through the framework of the OA Regulations, 2004 and could be determined on a fixed-capacity basis, an energy basis, or a combination thereof.

Applying the principle in PTC India Ltd. v. Central Electricity Regulatory Commission, (2010) 4 SCC 603, the Court held that statutory regulations, as subordinate legislation, prevail over inconsistent contractual terms and may modify or override contractual stipulations.

The Court further applied the principle that a subsequent and comprehensive regulatory framework governing a subject displaces the earlier legal basis on which inconsistent provisions operated.

The Court first construed the WBA as incorporating the applicable regulatory regime “as amended from time to time,” rather than freezing the parties’ rights under the 2009 framework.

Although the RERC Tariff Regulations, 2009 and 2014 had previously supported energy-based wheeling charges, their relevance to open-access consumers was derived from the OA Regulations, 2004, which referred the determination of such charges to the tariff regulations.

The OA Regulations, 2016 constituted a subsequent and comprehensive code on intra-State open access and specifically prescribed capacity-based billing under Regulation 15.

Consequently, the express repeal of the OA Regulations, 2004 and the replacement provision in Regulation 32(2) removed the earlier legal basis for applying the 2009/2014 tariff provisions to determine the basis of open-access wheeling charges.

The fact that the RERC Tariff Regulations, 2014 were not expressly repealed did not preserve their application for this specific purpose.

The Appellant’s contractual reliance on energy-based computation was therefore subordinate to the subsequently enacted regulatory mandate.

The WBA did not protect the Appellant from subsequent regulatory amendments, and the continued existence of the RERC Tariff Regulations, 2014 did not authorise energy-based billing after the repeal of the OA Regulations, 2004.

The appeal was dismissed as devoid of merit, and RERC’s Impugned Order dated 23 April 2019 in Petition No. 1393/2018 was affirmed.