KARNATAKA HC STRIKES DOWN GREEN ENERGY RULES

GS2 – GOVERNANCE 

In a landmark decision, the Karnataka High Court invalidated the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (GEOA Rules), along with associated Karnataka Regulatory Commission Regulations, 2022.

Key Facts of the Case

Petitioners’ Arguments

• Hydropower companies argued that the GEOA Rules infringed upon the Karnataka Electricity Regulatory Commission’s (KERC) exclusive jurisdiction under Sections 42(2) and 181 of the Electricity Act, 2003.

Centre’s Defence

• Legal Basis: The Centre defended the GEOA Rules citing its authority under:
  • Entry 14 (Union List) and Entry 38 (Concurrent List) of the Constitution.
  • Section 176(1) of the Electricity Act.
• International Commitments: It argued that these rules were essential to fulfill India’s COP26 climate commitments.

Court’s Decision

• The Central Government cannot override the Electricity Act’s framework, which grants State Regulatory Commissions exclusive powers.
• Section 176(2) cannot be stretched as a residual power to intrude into state-level regulatory matters.

Relevant Provisions of the Electricity Act, 2003

• Section 42(2): Grants State Commissions authority to regulate open access for electricity distribution.
• Section 181: Empowers State Commissions to frame rules in accordance with the Act.
• Section 176(1): Permits the Centre to make rules to implement the Act.
• Section 176(2): Limits the Centre’s role to framing rules for specific functions like those of the Central Electricity Authority.

Key Features of GEOA Rules, 2022

• Objective: Promote renewable energy to ensure affordable, reliable, and sustainable energy access.
• Highlights:
  • Promotes various green energy forms, including waste-to-energy.
  • Reduces the open access threshold from 1 MW to 100 kW, benefiting smaller consumers.
  • Allows consumers to demand green energy from DISCOMs.
  • Introduces uniform Renewable Purchase Obligations (RPO), including green hydrogen and ammonia.
  • Offers incentives like reduced surcharges and green certificates for renewable energy usage.

Committees on Power Sector Reforms

• Deepak Parekh Committee (2008): Proposed financing solutions for power projects.
• Ashok Chawla Committee (2011): Reviewed resource allocation for power generation.
• Kirit Parikh Committee (2022): Recommended pricing reforms for power-related fuels.

India’s Updated COP26 Climate Targets (2021)

1. Achieve net-zero carbon emissions by 2070.
2. Build 500 GW of energy capacity from non-fossil fuel sources by 2030.
3. Ensure 50% of total energy comes from renewable sources by 2030.
4. Reduce 1 billion tonnes of carbon emissions by 2030.
5. Lower the economy’s carbon intensity by 45% from 2005 levels by 2030.

Implications of the Judgment

• The decision reaffirms the autonomy of State Electricity Regulatory Commissions in managing open access and renewable energy regulations.
• It emphasizes the constitutional balance of power between the Centre and the States in the energy sector.
• May prompt a revision of national renewable energy strategies to align with the federal structure of governance.