India: Energy and Natural Resources

The Draft Regulations represent a significant regulatory shift towards a capacity-based access model aligned with evolving electricity market structures, increasing renewable energy penetration, growth of green open access transactions and the emergence of energy storage systems.

One of the key issues before the Ld. Madhya Pradesh Electricity Regulatory Commission (“MPERC”) was whether MB Power was entitled to gross-up its Return on Equity (“RoE”) notwithstanding the fact that, at the corporate level, it had not paid income tax during certain years owing to losses and unabsorbed depreciation arising from its other businesses. MPPMCL opposed the claim, inter alia, on the grounds that the claim was barred by limitation and that grossing-up could not be permitted in the absence of actual tax payment by the corporate entity.

SC in Punjab State Power Corporation Limited v Talwandi Sabo Power Limited & Ors., 2026 INSC 515 , set aside the order of the APTEL and restored the penalty order of the Punjab State Electricity Regulatory Commission (PSERC) against Talwandi Sabo Power Limited (TSPL).