Supreme Court Upholds Applicability of Renewable Purchase Obligation on Captive Power Plants

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The Supreme Court order dated 13 May 2015 in the case between the Hindustan Zinc vs Rajasthan Electricity Regulatory Commission on the applicability of Renewable Purchase Obligation (RPO) regulations has ruled that RPO on captive consumer is justified and interpreted it in the context of Article 51A (g) of the Constitution of India that cast a fundamental duty on the citizen to protect and improve the natural environment, and the mandate of Article 21 that guarantee right to live with healthy life.

The Section 86 (1) (e) of the Electricity Act (EA) 2003 provides for Renewable Purchase Obligation (RPO) on consumption of energy and the RPOs are determined by respective State Electricity Regulatory Commissions. The applicability of RPOs is on the Distribution Companies (Discoms) Captive Power Plants (CPP) and also on Open Access (OA) consumers.

In August 2012, the Rajasthan High Court had dismissed an appeal by Hindustan Zinc Ltd., Ambuja Cements Ltd., Grasim Industries Ltd., and 14 other companies that challenged RPO regulations enacted by the Rajasthan Electricity Regulatory Commission (RERC) for put RPOs on Captive Power Plants. The key Captive Power Plants and Open Access users had contested that RERC did not have the authority to pass the order of RPO and impose surcharge (penalty) as CPP and OA were completely de-licensed activities under the Electricity Act 2003. Further that EA 2003 only allows RPO on the ‘total consumption in the area of the distribution licensee’ and therefore intends to apply RPO on distribution licensees only. The Hindustan Zinc had appealed in the Supreme Court against the High Court.

The Supreme Court order is a positive development and will help in enhancing RPO compliance and further contribute to renewable energy growth in the country.

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Saurabh
Saurabh Sinha, Editor of IndianBureaucracy.com, is known for his credible, precise and insightful coverage of governance, civil services and administrative developments in India. Under his leadership, the portal has grown into a trusted national platform for accurate updates, appointments and policy movements within the bureaucratic ecosystem. Saurabh’s strong professional networking and deep understanding of government functioning enable him to present timely, reliable and well-contextualised information to readers across sectors. As a thought-driven editor, he promotes informed dialogue on governance reforms while maintaining high editorial standards. His calm, consistent and detail-oriented approach continues to strengthen the portal’s reputation. इंडियनब्यूरोक्रेसी.कॉम के संपादक सौरभ सिन्हा देश की नौकरशाही, शासन व्यवस्था और प्रशासनिक गतिविधियों की विश्वसनीय तथा संतुलित रिपोर्टिंग के लिए जाने जाते हैं। उनके नेतृत्व में यह पोर्टल नियुक्तियों, नीतिगत बदलावों और प्रशासनिक खबरों का एक भरोसेमंद राष्ट्रीय स्रोत बन चुका है। शासन तंत्र की गहरी समझ और मजबूत पेशेवर नेटवर्क के कारण सौरभ पाठकों को समयबद्ध, सटीक और संदर्भित जानकारी प्रदान करते हैं। एक विचारशील संपादक के रूप में वे सुशासन, पारदर्शिता और सुधारों पर सकारात्मक संवाद को बढ़ावा देते हैं। उनकी शांत, सूक्ष्म और पेशेवर संपादकीय शैली पोर्टल की प्रतिष्ठा को लगातार मजबूत कर रही है।