New Delhi, May 8: In a significant ruling impacting the power sector and electricity consumers, the Supreme Court on Thursday observed that consumers cannot be compelled to pay for a service they no longer receive. The Court said tariff determination is “not merely a mathematical exercise but a regulatory balancing act” aimed at protecting consumer interests while ensuring viability of utilities.
A bench of the apex court set aside a February 2025 order of the Appellate Tribunal for Electricity (APTEL), which had allowed the entire capital cost of the Rithala Combined Cycle Power Plant in Delhi to be recovered through depreciation over a period of 15 years.
The dispute related to recovery of capital expenditure for the gas-based power plant after it ceased operations. APTEL had earlier ruled in favour of allowing the full depreciation recovery, a move challenged on the grounds that consumers should not bear the burden for services no longer being provided.
Overturning the tribunal’s decision, the Supreme Court stressed that electricity tariff fixation must balance commercial considerations with public interest and consumer protection.
The judgment is expected to have wider implications for tariff regulations, stranded power assets and future recovery mechanisms adopted by electricity regulators and distribution companies across India.
