JSA Successfully Represented The Tata Power Company Limited Before Hon’ble APTEL In Upholding TPCL’s Network Rollout Plan For Its Mumbai Parellel Distribution Area Common To MCGM/ BEST

On 11.03.2026, Hon’ble Appellate Tribunal for Electricity (“Hon’ble APTEL”) passed its judgment upholding Ld. Maharashtra Electricity Regulatory Commission’s (“Ld. MERC”) Order approving phase-wise network development in the Island City of Mumbai with respect to the parallel licensed area between BEST and TPCL.

By the said Judgment, APTEL has upheld the phase wise development of distribution network. In particular, it was held that:

1. Requirement of pre-owning of distribution network has not been mandated in the Electricity Act to be eligible for the grant of a license for the distribution of electricity.
2. As per Section 42 of the Electricity Act, a distribution licensee is mandated to develop and maintain an efficient and economical distribution system within its area of supply, which would mean progressive expansion and improvement of the distribution system. This is not a one-time activity; instead, it means the licensee must continuously plan and invest in infrastructure to meet growing demand and ensure reliability.
3. Thus, upon the grant of a distribution license, the Licensee cannot be expected to develop the entire distribution network at one go; the network will be developed in phases, and no timeline for such development has been mandated in the Act.
4. Section 43 of the Act also acknowledges that in the course of providing supply to a new customer, there would be instances where extension of substation and/ or distribution network would be required, and the same can be provided as per timelines specified by the State Commission/ or upon such extension.
5. Thus, even for meeting the Universal Service Obligation, the State Commission has to specify a timeline based on the requirement for extending the network, if any. Thus, the phased development of the distribution network under distribution license over 7 years as permitted, cannot be said to be in contravention of the provisions of the Electricity Act, 2003.

Further, in specific regard to the parallel distribution licensee scenario qua TPCL and BEST in Mumbai, Hon’ble APTEL, amongst others, noted that the approach followed by the Impugned Order to lay out the network by TPCL is the optimal approach considering its cost-effectiveness and to avoid selective bias in the coverage of areas or consumers. Adopting such an approach will enable faster coverage of the broader consumer base and foster a competitive market structure in line with the objectives of the Electricity Act. The same is preferable to sporadic network extensions to consumers located far from existing CSS/DSS, which typically involve longer lead times.

The exercise undertaken by Ld. MERC was the first of its kind in India, where a detailed network rollout plan was approved, considering practical difficulties in laying the network, consumer interests, and competitive neutrality. APTEL’s judgment establishes the foundation for laying parallel networks in India and provides much-needed clarity on implementing competition in electricity distribution.

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