Source: The Indian Express 

Introduction 

In a landmark judgment that has sent ripples through India's renewable energy sector, the Karnataka High Court struck down the central government's Green Energy Open Access Rules of 2022. Justice N S Sanjay Gowda delivered this ruling, which fundamentally challenges the central government's authority to regulate renewable energy access and reasserts the primacy of state electricity regulatory commissions. The decision impacts Karnataka's green energy landscape and impacts sets a significant precedent for center-state relations in energy regulation across India. 

What is the Background of the Brindavan Hydropower Private Limited and Union of India & Others? 

• Background  
• The case emerged from petitions filed by hydropower generation companies that had existing wheeling and banking agreements with transmission and distribution licensees 
  • The dispute was on two key regulations:  
    • The Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules 2022 framed by the Central Government 
    • The Karnataka Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2022 
• Key Contentions 
  • The petitioners presented several crucial arguments: 
    • The Central Government lacked statutory authority to frame the Green Energy Open Access (GEOA) Rules 
    • The rules effectively usurped powers exclusively reserved for the Karnataka Electricity Regulatory Commission (KERC) under Sections 42(2) and 181 of the Electricity Act,2003 
    • The regulations made KERC subservient to the Centre, violating the fundamental objective of the Electricity Act to minimize government interference in the electricity sector 
• The Centre's Defense 
  • The Central Government defended its position on multiple grounds: 
    • Claimed rule-making power under Entry No.14 of the Union List and Entry 38 of the Concurrent List 
    • Cited international treaty obligations as justification 
    • Asserted authority under Section 176(1) of the Electricity Act 
    • Argued for residual powers to frame rules for implementing the Act's provisions 

• The Court's Judgment 
  • Key Findings 
    • Constitutional and Statutory Framework: 
      • The Court states that rule-making bodies must function within statutorily granted limits 
      • Rejected the Centre's claim of inherent power to frame rules 
      • The Electricity Act specifically empowers State Regulatory Commissions 
    • Regulatory Independence: 
      • Affirmed that State Commissions alone have the authority to:  
        • Introduce open access 
        • Determine wheeling charges 
        • Set payment surcharges 
      • The need for an independent and impartial regulatory body 
    • Government Role Limitations: 
      • Noted that neither state nor central government has power to interfere in electricity supply administration 
      • The deliberate legislative intent to minimize government control over electricity regulation 

What are the Immediate Impact and Directions of Courts? 

• The Court: 
  • Struck down both the central GEOA Rules and the related Karnataka regulations 
  • Directed KERC to frame fresh regulations if desired 
  • Maintained interim orders to protect existing wheeling and banking facilities 
  • Suggested measures to prevent profit exploitation through annual banking facilities 

How have Supreme Court Judgments Shaped The Legal Principles Governing Regulatory Frameworks and Delegated Powers IN India? 

• Supreme Court Precedents 
  • Naresh Chandra Agrawal v. The Institute of Chartered Accountants of India,2024  
    • Established limits on delegated rule-making power 
    • States that rules cannot extend beyond the scope of the parent act 
    • The principle that delegated authority cannot create new substantive rights or obligations 
  • Kerala State Electricity Board v. Jhabua Power Limited,2024 : 
    • Clarified the relationship between state regulatory commissions and government directives 
    • Established that commissions should be guided by, but not bound to, state and central directions 
    • the regulatory independence 
• Legislative Evolution 
  • The judgment referenced the Karnataka Electricity Reforms Act, 1999 : 
    • Historical evolution of power sector regulation 
    • Gradual reduction in government control 
    • Shift towards independent regulatory framework 

What are the Legal and Regulatory Frameworks Governing Green Energy Open Access in India? 

• Electricity Act, 2003  
  • Section 42(2): Deals with the State Commission's power regarding open access 
  • Section 86(1)(e): Specifies functions of State Commission regarding renewable energy sources, grid connectivity, and electricity sale 
  • Section 176(1): Central Government's rule-making power 
  • Section 176(2): Residual power of Central Government to frame rules 
  • Section 181: Powers of State Commission to make regulations 
• Karnataka Electricity Reforms Act, 1999  
  • Specific section not mentioned, but provisions referenced regarding:  
    • State Government's power to issue Policy Directives to the Commission 
    • Condition that directives must be consistent with KER Act objectives 
    • Limitations on State Government's control over Regulators 
• Constitutional Provisions  
  • Entry No. 14 of the Union List (Seventh Schedule) 
  • Entry 38 of the Concurrent List (Seventh Schedule) 
• Rules and Regulations Referenced  
  • Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules 2022 (Central Government) 
  • Karnataka Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2022 
  • Electricity Policy, 2005 

Conclusion 

The Karnataka High Court's judgment represents a significant milestone in India's evolving energy regulatory landscape. While reaffirming state regulatory commissions' authority, it raises important questions about achieving national renewable energy goals within a federal framework. The ruling provides the need for careful legislative design that respects constitutional divisions of power while enabling India's green energy transition. As states work to frame new regulations, the focus must remain on creating an enabling environment for renewable energy growth while maintaining regulatory independence and effectiveness.