In Brief
Maharashtra State Electricity Distribution Company challenged an order quashing its captive power plant (CPP) policy circulars issued from 1998–2001. The Electricity Regulatory Commission, constituted in 1999, had retroactively annulled the circulars—issued before its establishment—and ordered refunds. The Supreme Court held that before a commission is formed, the state electricity board retains power to set tariffs and frame regulations under the prior statute. A commission cannot invalidate pre-establishment circulars on the sole ground of lack of prior approval without deciding merits. The Court set aside the refund order, noting the commission had earlier recognized CPP policy as a state policy matter and that costs had been passed to third-party consumers.
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