Railways staring at higher electricity costs after Supreme Court rules it qualifies as ‘consumer’ | India News
Indian Railways Later looking at high electricity prices Supreme Court Last week ruled that the national transporter qualifies as a “consumer” under the Electricity Act. As a result, Railways will be liable to pay cross-subsidy surcharge (CSS) and additional surcharge while purchasing power through open access for own use, affecting operating ratios.This is likely to increase the power procurement cost of railways. It argued that the railways should not be treated as a conventional consumer as it distributes electricity across its vast operational network. However, the SC rejected this contention and clarified that Railways purchase power through open access “exclusively for self-consumption”, and therefore, falls within the definition of a consumer under the Electricity Act, 2003.The order passed by a two-judge bench comprising Justices Dipankar Dutta and Satish Chandra Sharma said, “It is clear that, for the reasons stated above, the appellant (Indian Railways) does not pass the master as a deemed distribution licensee under the Act, and it cannot in any case escape from the additional charges and additional liability. Electricity through open access.”The court directed the state electricity distribution companies to calculate and issue a detailed statement of outstanding CSS and additional surcharge payable by the appellant. It added that the calculation must clearly state the amount based on the area of supply and the period of use of open access. “The appellant shall be given a reasonable opportunity and time to respond to the said count,” it saidThe dispute erupted when the railways sought to procure 100 MW of power through inter-state open access for its traction substations in Maharashtra. The Maharashtra State Electricity Transmission Company refused the connection, prompting the railways to seek a declaration from the Central Electricity Regulatory Commission (CERC) that it is a deemed distribution licensee (DDL) exempt from surcharge.CERC ruled in favor of the railways in 2015, but it was challenged by several State Electricity Regulatory Commissions (SERCs) and discoms. The Appellate Tribunal for Electricity (APTEL), in its final judgment dated 12 February 2024, set aside the CERC order, holding that Railways is a consumer and not a DDL.Railways challenged these orders in the SC.
