The Rajasthan Electricity Regulatory Commission (RERC) has dismissed joint petitions filed by Sudiva Spinners Pvt. Ltd. and RSWM Ltd. seeking relief from specific renewable energy mandates. The petitioners approached the Commission under Regulation 6 (Removal of Difficulties) of the RERC (Renewable Purchase Obligation) Regulations, 2023. The ruling was delivered by a bench comprising Chairman Dr. Rajesh Sharma, Member Hemant Kumar Jain, and Member Vijay Pal Singh.
Petitioner Profiles and Core Arguments
The petitioners are major industrial players in the textile sector: Sudiva Spinners Pvt. Ltd., which operates a 14.984 MW plant, and RSWM Ltd., which utilizes captive solar installations exceeding the 1 MW threshold.
The petitioners’ primary legal challenge concerned the classification of “behind-the-meter” (BTM) solar energy. They argued that self-consumed solar power—connected directly to a consumer’s internal network—should be treated as distinct from traditional grid-connected power. They posited that because the boundary meter at the interface with the Rajasthan grid does not record internal generation, the state network remains “effectively oblivious” to the facility’s instantaneous power requirements. On this basis, the petitioners sought parity with other states where BTM configurations might receive varied treatment, and they cited administrative hurdles regarding the verification of International Renewable Energy Certificates (I-RECs) and carbon credits.
Position of RRECL and State DISCOMs
The Rajasthan Renewable Energy Corporation Ltd. (RRECL) and state distribution companies (DISCOMs) opposed the petitions, maintaining that any entity with a captive plant of 1 MW and above is categorized as an “obligated entity” under the 2023 Regulations. The respondents argued that the RPO framework is a fundamental pillar of environmental compliance and that the technical placement of a meter does not alter an entity’s statutory obligations. They further emphasized that a strict regulatory firewall against the “double-counting” of environmental attributes is necessary to protect the accuracy of the state’s renewable energy accounting.
The Ruling: RERC’s Legal Rationale
The Commission rejected the petitioners’ request for an exemption, affirming that the 1 MW threshold remains the definitive metric for RPO compliance. In its legal reasoning, the RERC relied on the Supreme Court’s landmark decision in Hindustan Zinc Ltd. vs. RERC, which established that RPO mandates are a valid exercise of constitutional and statutory authority intended to protect the environment and promote renewable energy.
Drawing on the logic found in Tata Steel vs. OERC/APTEL and the Lloyds Metal precedents, the Commission clarified that the mandate under Section 86(1)(e) of the Electricity Act is centered on the promotion of renewable sources of energy, regardless of the technical configuration of the generation. The Commission found that while BTM self-consumption naturally counts toward an entity’s own RPO targets—precluding the need to purchase additional green power for that specific volume—it does not remove the entity from the RPO regulatory and monitoring framework.
Furthermore, the Commission highlighted that just as “co-generation” is legally defined as a process rather than an energy source that automatically exonerates an entity, the “Behind-the-Meter” configuration is a technical arrangement that does not override the statutory environmental mandate.
Regulatory Accounting and the “Double-Counting” Rule
The Commission’s ruling underscored a rigorous approach to the monetization of energy attributes. It established that the choice between using solar generation for RPO offsets or external monetization is a definitive regulatory firewall.
The requirements for environmental attributes are as follows:
- Prohibition of Simultaneous Claims: Electricity utilized to satisfy internal RPO compliance cannot be simultaneously used to claim I-RECs or carbon credits.
- Integrity of Renewable Accounting: The “double-counting” of “green” attributes is strictly prohibited to ensure the integrity of carbon reduction data.
- Mandatory Operational Choice: Obligated entities must elect to either apply their generated power toward their RPO trajectory or seek external financial benefits through environmental certificates; they cannot do both.
The RERC’s decision reaffirms the state’s commitment to the RPO trajectory for all large-scale captive consumers. RRECL, as the designated state agency, will continue to monitor generation and consumption data to verify compliance. Entities operating captive solar installations above 1 MW remain obligated to provide all necessary data to the agency to ensure that state-wide renewable energy targets are accurately met.
Official Sources and Citations
1. Rajasthan Electricity Regulatory Commission (RERC)
- Order Date: 28 July 2026
- Petition Numbers: 2288/2025 (M/s Sudiva Spinners Pvt. Ltd.) and 2289/2025 (M/s RSWM Ltd.)
- Subject: In the matter of Removal of difficulties under regulation 6 of the RERC (Renewable Purchase Obligation) Regulations, 2023.
- Official Link: RERC Office Orders Portal
2. Appellate Tribunal for Electricity (APTEL)
- Judgment Date: 20 February 2024
- Appeal Number: APL No. 337 of 2023 (M/S Tata Steel Ltd vs. Odisha Electricity Regulatory Commission & Ors.)
- Legal Significance: Upholds that captive consumers utilizing energy from co-generation plants are not exempt from RPO obligations under Section 86(1)(e) of the Electricity Act, 2003, and confirms the binding nature of the Hindustan Zinc Ltd. Supreme Court precedent.
- Official Link: APTEL Website
3. Supreme Court of India
- Case Citation: Hindustan Zinc Ltd. v. Rajasthan Electricity Regulatory Commission, (2015) 12 SCC 611.
- Legal Significance: Declares that State Commissions have the power under Section 86(1)(e) to specify minimum percentages of renewable energy to be purchased by captive power consumers in the interest of environmental protection.
4. Ministry of Power (MoP), Government of India
- Notification: Renewable Consumption Obligation (RCO) framework (S.O. 4421(E) dated 27.09.2025).
- Tariff Policy: National Tariff Policy 2016.
- Official Link: Ministry of Power – National Electricity Policy
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