SEB Rates Preferred Over IEX Rates for Captive Power Benchmarking

Significance of SEB Rates in Captive Power Transfers

The ITAT Delhi has established that rates charged by State Electricity Boards (SEBs) should be considered as the accurate benchmark for captive power transfers, as opposed to rates from the Indian Energy Exchange (IEX). This ruling aligns with previous judgments and clarifies the pricing mechanism in the captive power market.

The Tribunal supported its decision by referencing established rulings from both the Delhi High Court and the Supreme Court, reinforcing the idea that SEB tariffs more accurately reflect the consumer purchase price due to their regulatory backing and broader applicability.

This ruling has far-reaching implications for entities engaged in captive power consumption, as the established methodology will impact pricing strategies and energy procurement decisions going forward.

Practitioners in energy law should take note of this decisive stance by the Tribunal, particularly when advising clients on power purchase agreements and compliance with regulatory standards in the energy sector.