APTEL Expands Regulatory Reach, Holds PEDA Accountable Under Electricity Act

In a crucial judgement, the Appellate Tribunal for Electricity (APTEL) has clarified that the Punjab Energy Development Agency (PEDA) can be made a party in disputes adjudicated by State Electricity Regulatory Commissions under Section 86(1)(f) of the Electricity Act, 2003. The verdict came during a batch of appeals. 

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The appeals involved a complex array of parties, including PEDA, Punjab State Electricity Regulatory Commission (PSERC), Punjab State Power Corporation Ltd. (PSPCL), and renewable energy developers such as Atlantic Power Pvt. Ltd., Mihit Solar Pvt. Ltd., Radiant Solar Energies Pvt. Ltd., and Hindustan Clean Energy Ltd.

At the heart of the dispute lay two legal questions: whether PEDA can be impleaded in regulatory disputes, and whether directions issued to it by the Commission are legally binding and appealable.

Tribunal Rules PEDA is Subject to Commission Oversight

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APTEL held that PEDA, despite not being a generator or licensee, falls within the regulatory ambit when it undertakes activities directly related to power generation or procurement for the state or its utilities. The Tribunal observed that Section 86(1)(f) of the Electricity Act, when read with other provisions and the Act’s objectives, supports such inclusion.

"Reading the section narrowly would lead to absurdity," the Tribunal said. It applied the Mimansa principles of statutory interpretation, asserting that Section 86(1)(b) — which gives Commissions broad regulatory powers — must take precedence over the narrower language of Section 86(1)(f) concerning dispute resolution.

Broad Interpretation of “Regulate”

The Tribunal cited multiple Supreme Court judgments to interpret the word “regulate” as having a wide connotation, encompassing the power to issue directions, even to non-licensee entities like PEDA. It referenced a recent Supreme Court ruling (Municipal Corporation of Delhi vs. Gagan Narang & Ors., 2025 SCC Online SC 19) to affirm that even public bodies not traditionally seen as licensees can fall under regulatory oversight in the context of power procurement.

Disputes Arising from Delays and Financial Liabilities

The various appeals arose from the delayed commissioning of renewable energy projects in Punjab. In each case, PEDA sought to invoke performance bank guarantees or withhold payments, while developers sought relief through the State Commission.

For instance, in the lead appeal involving Atlantic Power Pvt. Ltd., the developer challenged the Commission’s refusal to re-determine tariffs, while PEDA opposed the Commission’s direction to recover construction costs from its energy share. In another case, Mihit Solar Pvt. Ltd. secured a Commission order releasing its bank guarantee despite delay, which PEDA challenged.

APTEL noted that Implementation Agreements signed with PEDA were intrinsically linked to Power Purchase Agreements with PSPCL, making disputes inseparable and inappropriate for bifurcation between different forums.

Directions Upheld, Appeals to Proceed

The Tribunal ruled that Electricity Regulatory Commissions can issue enforceable directions to PEDA and that such directions are appealable under Section 111(1) of the Act. It effectively inserted the words “and any other agency/entity directly engaged in generation and procurement of power on behalf of Government or the Licensees” into Section 86(1)(f) through judicial interpretation, citing the legislature’s intent to strengthen regulatory coherence.

As a result, all appeals in this matter will now be heard on their merits in light of this clarification.

Implications:

This ruling expands the regulatory reach of the Electricity Commission and clarifies the accountability of state agencies like PEDA. Legal experts suggest it will streamline dispute resolution and prevent fragmentation across civil and regulatory courts. It also strengthens the Commission's hand in regulating the increasingly complex renewable energy value chain.