The Supreme Court has ruled that consumers cannot be made to pay for a service they no longer receive, saying tariff determination is not merely a mathematical exercise but a regulatory balancing act aimed at protecting consumer interests. A bench of Justices P S Narasimha and Alok Aradhe set aside a February 2025 order of the Appellate Tribunal for Electricity, APTEL, in connection with the Rithala Combined Cycle Power Plant in Delhi. The apex court restored the Delhi Electricity Regulatory Commission’s 2019 order, which had denied recovery of the remaining capital cost of the plant through tariff after electricity supply stopped in March 2018.

 

The court observed that consumers cannot be burdened with charges for a service no longer provided. It said safeguarding consumer interest is a central principle under the Electricity Act, 2003.

 

The dispute arose after APTEL directed that the entire capital cost of the plant be recovered through depreciation over 15 years. However, the Supreme Court noted that the Power Purchase Agreement for the plant was approved only for six years. The plant was set up ahead of the 2010 Commonwealth Games to meet Delhi’s urgent power requirements.