APTEL Upholds National Cost Sharing for Solar Transmission Line

In a significant ruling, the Appellate Tribunal for Electricity (APTEL) has upheld a CERC decision to classify a transmission line built to evacuate power from the NP Kunta Solar Park in Andhra Pradesh as an Inter-State Transmission System (ISTS). The order rejected objections raised by the Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO).

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The APTEL ruling affirms an earlier order of 2016, issued by the Central Electricity Regulatory Commission (CERC). CERC, in its earlier order, had allowed Power Grid Corporation of India Ltd. (now Central Transmission Utility of India Ltd. or CTUIL) to treat the solar evacuation line as part of the ISTS network. The decision means the transmission cost will be shared nationally under the Point of Connection (PoC) mechanism.

TANGEDCO’s Appeal Rejected

TANGEDCO had argued that the line was designed to serve a state-specific project, with nearly 90 percent of the power consumed within Andhra Pradesh. It contended that the infrastructure was a "dedicated transmission line" under the Electricity Act and should not be classified as ISTS, which would otherwise allow tariff recovery from utilities nationwide.

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The state utility also pointed to the absence of a Transmission Service Agreement (TSA) and questioned whether the line had received grants from the Ministry of New & Renewable Energy (MNRE), arguing that such funding, if provided, should exclude the asset from the shared tariff pool.

POWERGRID Defends Central Classification

CTUIL, formerly known as POWERGRID, defended the classification and argued that as a central transmission utility, it is mandated to build and operate ISTS assets. The company said the line’s inclusion in the ISTS network had been approved in a prior regulatory order in 2015, which TANGEDCO had not challenged at the time.

CTUIL also clarified that a partial MNRE grant had been received and accounted for, with the amount deducted from the project’s capital cost in subsequent tariff determinations.

Tribunal Sides with Central Utility

In its unanimous verdict, the tribunal, comprising Technical Member Sandesh Kumar Sharma and Judicial Member Virender Bhat, dismissed TANGEDCO’s appeal and upheld the CERC order.

The judges ruled that:

• The transmission system qualifies as ISTS under Section 2(36)(iii) of the Electricity Act, even if located within a single state, as it is owned and operated by a CTU.

• The line cannot be considered a dedicated transmission asset, which is typically built and owned by a generator.

• TANGEDCO’s failure to challenge the original 2015 regulatory approval barred it from raising the same issue again under the doctrine of res judicata.

• A TSA is not a precondition for tariff determination when regulatory approval exists.

• The MNRE grant was properly adjusted in tariff calculations, and no undue burden was passed on to PoC beneficiaries.

National Significance

The ruling sets a precedent for how centrally owned infrastructure linked to renewable energy parks will be treated under India’s evolving electricity market. It reinforces the legal position that transmission assets built by CTUIL are part of the national grid and eligible for cost socialisation, regardless of localized power usage.

Analysts say the decision will aid smoother integration of large-scale renewable energy projects into the national grid and reduce financing uncertainty for central transmission developments.