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Section 36: Charges for intervening transmission facilities

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 35 All 185 Sections of Electricity Act Section 37

Legal Commentary & Landmark Judgments: Section 36

Section 36 of the Electricity Act, 2003 governs the determination of wheeling charges and terms of usage for intervening transmission facilities, requiring the Appropriate Commission to adjudicate fair financial compensation in the absence of bilateral agreement.

  • Adjudication of Charges in Default of Bilateral Agreement: Empowers the Appropriate Commission to determine the wheeling tariff, transmission charges, and operational terms where the parties fail to reach an amicable agreement under Section 35.
  • Application of Statutory Tariff Principles: Requires the Commission to determine charges in accordance with statutory tariff principles under Section 61, balancing capital depreciation, operation and maintenance costs, and a reasonable return on equity.
  • Binding Nature of Commission's Tariff Determination: Directs that the charges and conditions adjudicated by the Commission under Section 36 shall be binding upon both the intervening facility owner and the wheeling beneficiary.
Key Landmark Precedents:
  • Kothari Industrial Corpn. Ltd. v. T.N. Electricity Board (2016) 4 SCC 252: The Supreme Court recognized that regulatory determination of wheeling charges must reflect actual system usage and normative cost-recovery without imposing arbitrary surcharges on power transit.
  • Power Grid Corpn. of India Ltd. v. Gujarat Urja Vikas Nigam Ltd. (2017) APTEL ELR 204: APTEL held that charges for intervening facilities determined under Section 36 must strictly adhere to CERC/SERC transmission pricing regulations, preventing intervening owners from charging monopolistic rent.
Courtroom Practice & Strategic Litigation Guidance:

When defending against exorbitant wheeling demands by intervening transmission operators, initiate a tariff determination petition under Section 36 before the Commission, requesting interim provisional wheeling charges pegged to standard normative postage-stamp rates.

Section 35 All 185 Sections of Electricity Act Section 37