The Rajasthan Electricity Regulatory Commission (RERC) recently issued an order on a petition filed by the Military Engineer Services (MES) Headquarters, South Western Command. The MES had approached the Commission on February 27, 2024, seeking recognition and permission to operate as a distribution licensee for military stations located in Niwaru (Jaipur), Jodhpur, and Jaisalmer. The MES argued that it already qualifies as a “deemed licensee” under Section 14 of the Electricity Act, 2003. It pointed out that the Ministry of Power and several other state regulatory commissions had recognized its role in this regard. The MES also highlighted that it maintains its own distribution systems inside military areas and supplies power to multiple consumers, including offices, residential complexes, and private vendors, like state distribution companies.
However, this claim was strongly opposed by Jaipur Vidyut Vitaran Nigam Ltd. (JVVNL), Rajasthan Urja Vikas and IT Services Ltd. (RUVITNL), and Rajasthan Vidyut Prasaran Nigam Ltd. (RVPNL). The respondents argued that a “deemed licensee” cannot automatically be treated as a distribution licensee. They relied on a judgment of the Appellate Tribunal for Electricity (APTEL), which held that to qualify as a distribution licensee, an entity must not only operate distribution systems but also sell electricity to general consumers. In their view, the MES primarily uses power for its own consumption, and the supply made to different entities inside military premises cannot be regarded as a supply to independent consumers. They stated that such entities are contractually bound to MES, and therefore, the arrangement does not fall under the definition of “distribution” in the legal sense. The respondents also referred to a Supreme Court judgment that clarified that consumption of electricity for one’s own needs does not entitle an entity to the status of a distribution licensee.
A stakeholder, Shri G.L. Sharma, also raised questions on the necessity of the petition if MES was already considered a deemed licensee. He argued that the role of MES looked more like that of a bulk or open-access consumer rather than a distribution licensee. This argument further strengthened the opposing side’s position.
The Commission carefully examined the petition, replies, rejoinders, and oral arguments presented during the hearings. In its detailed review, the Commission referred to both Supreme Court and APTEL judgments, which made it clear that distribution involves supplying electricity to end consumers in the general sense, and not merely supplying power within one’s own premises under contractual arrangements. The Commission noted that MES’s operations were mainly directed at ensuring power supply for its own establishments and facilities, and did not amount to retail supply to consumers as envisaged under the law.
The Commission also drew parallels with a previous case involving Indian Railways, where the request for distribution licensee status was rejected on similar grounds. After considering all aspects, the RERC concluded that MES does not fulfill the legal requirements to be treated as a deemed distribution licensee under the Electricity Act, 2003. The order stated that while MES can continue to maintain its internal electrical system and act as a bulk consumer, it cannot claim the status or rights of a distribution licensee. As a result, the petition was disposed of, and the reliefs sought by MES, including the handover of assets and long-term power allocation, were denied.
This decision makes it clear that entities such as MES, even though they maintain large internal distribution networks, cannot be considered distribution licensees unless they meet the specific legal requirement of supplying electricity to independent consumers.
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