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CERC issues statutory advise to power ministry against framing of 3 rules; cites jurisdictional overlap

The jurisdictional battle between thepowerregulatorCentral Electricity Regulatory Commission(CERC) and theUnion power ministryseems to be escalating with the regulator advising the latter against framing of three rules which have been circulated for public comments.

CERC on Thursday issued a rare statutory advice under section 79 (2) to the Union power ministry asking it to not proceed with framing of rules — Electricity (change in Law, Must Run status, and other Matters) Rules, 2020; Transmission System Planning, Development, and Recovery of inter-State Transmission Charges Rules, 2020 and; Electricity (Late Payment Surcharge) Rules, 2020.

ET had Oct 14 reported that CERC has advised the government against introducing rules to lower late payment surcharge on distribution companies, saying they are non-tenable under law and may lead to infringement of its jurisdiction, said people aware of the matter.

CERC has issued such statutory advice to the government earlier in June this year but the same is used sparingly by the regulator. Prior to June, CERC had issued such advice to the power ministry in 2016.

The Union power ministry has rolled out several draft rules under section 176. Sources in the ministry said more such draft rules are in the offing.

CERC said the primary source of rulemaking power of the Central Government is Section 176(1) of the Electricity Act 2003 (EA2003) and Section 176(2)(z) is merely illustrative in nature.

Section 176 (1) of the act says the Central Government may, by notification, make rules for carrying out the provisions of this Act. Section 176 (2) (z) says without prejudice to the generality of the foregoing power, such rules may provide for any other matter which is required to be, or may be, prescribed.

CERC said that the Electricity Act 2003 envisages coordination between the Central government and the Central commission through various provisions.

Section 3 of the legislation provides for formulation of National Electricity Policy and Tariff Policy by the Central Government and Section 79(4) provides that the Central Commission in discharge of its functions under the act shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published under Section 3 of the EA2003.

“It would, therefore, be in the larger interest of the sector that the Central Government and the Central Commission work in harmony by honouring the respective jurisdiction carved out in the EA2003,” the advice said.

The commission said the draft rules on Electricity (change in Law, Must Run status, and other Matters) and Electricity (Late Payment Surcharge) are covered under the functions of the central and state regulators

“As these subjects are not covered under any of the substantive functions of the Central Government and therefore, making of rules in exercise of rule making power under Section 176 to carry out the provisions of the EA2003 will be against the letter and spirit of EA2003,” it said.


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