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CERC by its order dated 28.01.2026 in the matter of KSK Mahanadi Power Company Limited v. Southern Power Distribution Company of Andhra Pradesh Limited & Ors.1, reaffirmed that, while CERC has jurisdiction over tariff related disputes arising from a composite scheme, it can exercise its discretion to refer such disputes to arbitration. In cases where the dispute is non-tariff in nature, such reference to arbitration is mandatory under Section 79(1)(f) of EA 2003.
The generator approached CERC alleging non-payment of tariff, capacity charges and transmission charges and unilateral deductions from invoices by the distribution licensee and also challenged the termination of the PPA. The distribution licensees objected to CERC's jurisdiction, contending that the disputes were purely contractual money claims, not involving tariff determination or regulation, and therefore ought to be referred to arbitration or adjudicated by the State Commission under Section 86(1)(f) of EA 2003.
CERC rejected the objections and held that once a generating company supplies power under a composite scheme in more than one state, CERC becomes the appropriate commission under Section 79(1)(b) of the EA 2003. Further, 'regulation of tariff under Section 79 of the EA 2003 includes not only tariff fixation but also matters having a direct bearing on tariff implementation. Accordingly, CERC concluded that it possesses adjudicatory jurisdiction over the present dispute and not the State Commission. However, CERC, while exercising its's discretionary power to refer disputes to arbitration under 79(1)(b) read with Section 79(1)(f) of EA 2003, proceeded to refer both tariff related disputes and non-tariff relate disputes to arbitration and directed appointment of arbitrator under Regulation 49(1)(a) of the CERC (Conduct of Business) Regulations, 2023.
Footnote
1. Petition No. 91/MP/2018 and batch.
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