The Supreme Court has ruled that electricity consumers in Delhi cannot be forced to bear tariff charges for a power plant that stopped supplying electricity after March 2018. In a significant judgment, the Court set aside an order of the Appellate Tribunal for Electricity (APTEL) that had allowed Tata Power Delhi Distribution Limited (TPDDL) to recover the full capital cost of the Rithala gas-based power plant over 15 years.
A Bench of Justice Alok Aradhe and Justice P. S. Narasimha held that tariff recovery must remain linked to the actual period during which electricity was supplied to consumers.
Background of the Case
The dispute arose from the Rithala Combined Cycle Power Plant in Delhi, established by TPDDL ahead of the 2010 Commonwealth Games to meet peak electricity demand. The project was approved as a temporary arrangement with an operational life of only five to six years.
In its 2017 order, the Delhi Electricity Regulatory Commission approved operation of the plant only till March 2018. The Commission also determined the plant’s capital cost at ₹197.70 crore against TPDDL’s claim of ₹320.17 crore.
Later, while deciding TPDDL’s true-up petition, the Commission permitted depreciation recovery only for the six-year operational period. It refused to pass the remaining capital cost burden onto consumers because the plant had stopped supplying electricity after March 2018.
However, APTEL overturned that decision in February 2025 and directed that the entire capital cost should be recoverable through depreciation over the plant’s 15-year technical life.
The Supreme Court disagreed with APTEL’s reasoning and emphasized that tariff determination is not merely an accounting exercise.
“The consumers cannot be required to pay for a service which they no longer received,” the Bench observed while noting that electricity was admittedly not supplied after March 2018.
The Court said the Electricity Act requires regulators to balance cost recovery with consumer protection. It pointed out that TPDDL was free to sell electricity elsewhere as a merchant generator after the approved supply period ended.
The Bench further clarified that the 15-year “technical useful life” of the plant could not automatically translate into a 15-year tariff recovery right.
According to the judgment,
“Regulation 6.32 does not confer an absolute and unconditional right upon the generating utility to recover depreciation from consumers even for a period when the asset is free to supply electricity.”
The Court also noted that TPDDL had never challenged the 2017 order limiting the operational period to six years, meaning that framework had already attained finality.
Allowing the appeal filed by the Delhi Electricity Regulatory Commission, the Supreme Court restored the Commission’s 2019 order and set aside APTEL’s judgment dated February 10, 2025.
The Court held that TPDDL could not recover depreciation charges from Delhi consumers beyond March 2018, when the plant stopped supplying electricity under the approved framework. No costs were imposed.
Case Details
Case Title: Delhi Electricity Regulatory Commission v. Tata Power Delhi Distribution Limited
Case Number: Civil Appeal No. 6388 of 2025
Judges: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Decision Date: May 7, 2026
