By S&S Co. Advocates & Solicitors · Published 30 September 2026 · Informational content, not legal advice: see our disclaimer
CERC's Exclusive Functions Under Section 79(1)
Section 79(1) of the Electricity Act, 2003 lists the Central Electricity Regulatory Commission's regulatory functions in clauses (a) through (f). Clauses (a) to (d) give CERC exclusive jurisdiction over specific matters, including tariff regulation for generating companies covered by the section and inter-state transmission of electricity: jurisdiction that cannot be displaced by a contractual arbitration clause, however broadly worded. The equivalent provision for State Electricity Regulatory Commissions is Section 86, which performs a similar role at the state level.
Clause (f) and the Arbitration Boundary
The more contested territory lies in clause (f), which covers adjudication of disputes between a generating company and a licensee, and the related question of when such a dispute can instead be referred to arbitration under a PPA's own arbitration clause or under Section 79(1)(f)/86(1)(f) itself. Tribunal and court rulings have drawn a distinction between tariff-determination disputes, which remain within the commission's exclusive domain, and non-tariff disputes between a generating company and a distribution licensee, which can in appropriate cases be referred to arbitration instead.
Why This Line Keeps Being Re-Litigated
The precise boundary between these two categories is not static. It has been shaped and reshaped through successive tribunal rulings, including a 2026 case in which the Appellate Tribunal for Electricity reviewed and corrected its own earlier interpretation of a key precedent on this exact question, after a party argued APTEL had wrongly treated an important holding as a mere stray observation rather than binding guidance. This history illustrates that the characterisation of a given dispute as "tariff" or "non-tariff" for this purpose is not always obvious at the outset, and can itself become a significant point of contention before the merits of the underlying dispute are even reached.
How a PPA's Arbitration Clause Interacts With the Commission's Role
A power purchase agreement's own arbitration clause can validly govern disputes that fall outside the regulatory commission's specific statutory functions, giving generators and licensees a contractually agreed, potentially faster route to resolution for matters such as billing disputes, operational breaches, or other non-tariff disagreements. That clause cannot, however, be used to send a dispute that squarely falls within the commission's exclusive jurisdiction, such as tariff determination itself, to arbitration instead, doing so risks a successful jurisdictional challenge to any resulting award.
The Practical Cost of Getting the Forum Wrong
Because the distinction between an arbitrable and a commission-exclusive dispute is not always clear-cut, a party that proceeds in the wrong forum risks losing years to a dispute only to have the award, or the commission's order, challenged and potentially set aside for want of jurisdiction: after which the underlying dispute typically has to be litigated afresh in the correct forum. Parties drafting or relying on a PPA's dispute resolution clause should therefore characterise the likely nature of a future dispute as carefully as possible at the drafting stage, and revisit that characterisation with current case law before actually invoking either route when a dispute arises.
Frequently Asked Questions
Does CERC have exclusive jurisdiction over every dispute involving a generating company?
No. Section 79(1)(a) to (d) gives CERC exclusive jurisdiction over specific matters such as tariff regulation and inter-state transmission, but non-tariff disputes between a generating company and a licensee can, in appropriate cases, be referred to arbitration instead.
Can a PPA's own arbitration clause override the regulatory commission's role?
A PPA's arbitration clause can govern disputes that fall outside the commission's specific statutory functions, but it cannot be used to arbitrate a matter that squarely falls within the commission's exclusive jurisdiction, such as tariff determination.
Why does getting this characterisation right matter so much?
Pursuing a dispute in the wrong forum, whether arbitration or the regulatory commission, can mean years of litigation only to have the resulting award or order challenged and set aside for want of jurisdiction, with the dispute then having to be re-litigated from scratch in the correct forum.
Is this an area of settled law?
No, the exact boundary continues to be clarified through tribunal and court rulings, including a 2026 review ruling by APTEL correcting its own earlier interpretation, so parties should check the current state of the law before assuming a given dispute falls on one side of the line or the other.
References & Further Reading
This article references the following statutory provisions and case law. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- The Electricity Act, 2003, Sections 79 (Functions of Central Commission) and 86 (Functions of State Commission).
- Tata Power Company Ltd. v. Gujarat Urja Vikas Nigam Ltd. & Ors. (Review Petition), APTEL order dated 17 September 2026, clarifying the scope of Section 79(1)(f) arbitration referral following the Damodar Valley Corporation precedent.