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Home / UPSC Editorials / Karnataka High Court Strikes Down Central Green Energy Rules

Karnataka High Court Strikes Down Central Green Energy Rules- UPSC Editorial

Last Updated on Jan 24, 2025
Also Read Karnataka High Court Strikes Down Central Green Energy Rules in Hindi
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Karnataka High Court recently scrapped some of the significant green energy rules framed by the central government. The court has held that the central government does not have the authority under the Electricity Act to create such rules. Rather than this, it focuses on the fact that it is those State Commissions that are entrusted with regulation of "open access" issues in renewable energy areas. Thus, this judgment lays emphasis on jurisdiction and the defined roles of different regulatory authorities under the Electricity Act.

For the UPSC aspirants, this topic is essential because it touches upon federalism, judicial review, and energy policies, all of which fall within the purview of the General Studies papers. This knowledge helps them enhance their understanding about the jurisdictional limits of the central and state governments and the role of judiciary in maintaining those boundaries.

Analysis based on 

Editorial Why the Karnataka High Court struck down green energy rules by centre, state

 

published in The Indian Express on January 23rd, 2025

Topics for UPSC Prelims

Renewable Energy Policies, Federal Structure in India

Topics for UPSC Mains

Judiciary and Regulatory Framework, Federalism and Jurisdictional Roles

Why in News?

 A key case is that Karnataka High Court had struck down central green energy rules. It makes its implications for the concept of federalism and judicial review, by showing jurisdictional boundary between central government and state governments in Electricity Act, 2003, under the purview of regulatory power regarding renewable energy.Such topics are seen very often in UPSC exams through questions on separation of powers, administrative law, and energy policies, which makes it really important for an aspirant to know this case.

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Karnataka High Court Decision

The Karnataka High Court recently quashed central government norms on green energy. These were framed under the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022. The court held that the central government does not have jurisdiction to frame such rules under the Electricity Act as only the State Commissions have such jurisdiction.

Striking Down of Rules

The Karnataka High Court struck down the central government’s Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022. The court ruled that the central government overstepped its authority as these rules fall within the jurisdiction of state regulatory bodies under the Electricity Act, 2003.

Jurisdictional Limitations

The judgment also emphasized that the powers of the central government under the Electricity Act, 2003 do not extend to regulation of "open access" in renewable energy markets. This has underlined the need to strictly adhere to statutory boundaries set by the Act.

Decentralization of Regulatory Power

Companies opposed state regulations through central law. Justice N S Sanjay Gowda held in favor of decentralizing the regulatory power to state commissions while strictly adhering to the statutory provisions and keeping proper jurisdictional boundaries.

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Regulatory Authority

It underscored the role of State Commissions in controlling "open access" in renewable energy. It has observed that the Electricity Act, 2003, vests exclusive powers of regulation in these commissions. This judgment reiterates that the central government cannot encroach upon areas especially allocated to state authorities, keeping jurisdictional demarcations forth.

Exclusive State Regulation

The Karnataka High Court highlighted that State Commissions have exclusive powers to regulate "open access" generation, transmission, and supply of electricity under the Electricity Act, 2003 including renewable energy regulations.

Prevention of Central Overreach

This ruling does not allow the center to enter the jurisdiction of the state's regulatory bodies; instead, it safeguards the powers of the state authority over local energy markets and related regulatory procedures. 

Legal Implications 

The order of the court establishes the principle that the regulation over renewable energy open access shall only be governed by the state level commissions to have an unambiguous and compliant regime of regulation. 

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Role of State Commissions

As noted by State Commissions Justice Gowda, management of renewable energy generation that includes grid connectivity and energy sale is one of the statutory functions under the control of State Commissions.Decentralization plays an important role in regulating the energy market to make sure state bodies retain their regulatory power as expected in the law.

Regulation under Section 86(1)(e)

Justice Gowda pointed out that Section 86(1)(e) of the Electricity Act places upon the State Commissions the tasks of regulating the generation, transmission of renewable energy and ensuring grid connectivity within their territories.

State-Specific Regulation

 State Commissions govern the open market procurement of green energy to ensure the satisfaction of specific state-specific requirements by the body concerned. 

Decentralized Regulation

This ruling emphasizes decentralizing renewable energy regulation to state authorities, allowing state-specific strategies to be implemented by localized regulatory bodies without central government intervention.

Read article on Urban Jyoti Abhiyaan (URJA)!

Past Judgments

The court cited previous judgments of the Supreme Court to justify its decision. In Naresh Chandra Agrawal v The Institute of Chartered Accountants of India, the SC held that rule-making bodies should not overstep the limits provided by statute. Such precedents strengthen the argument for the observance of statutory limits and avoid the exercise of regulatory powers beyond the limits prescribed.

Observance of Statutory Limits 

The Karnataka High Court relied upon Supreme Court order Naresh Chandra Agrawal v. The Institute of Chartered Accountants of India whereby it stated that rule making body must confine itself within limits prescribed to the rule-making powers by enabling statue.

State Commission Autonomy

Autonomy The Supreme Court case in Kerala State Electricity Board v Jhabua Power Limited reiterated the position that the state regulatory commissions are governed by, but not limited by, directives from the central or state authority..

Prevention of Overreach

Such earlier judgments provide an emphasis that delegated powers cannot take precedence over statutory authority given to particular organizations; hence, neither the central government nor its constituent agencies can reach out to exceed defined boundaries in law. 

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Consequences for Federalism 

This judgment brings a lot of implications to the Indian system of federalism. The division of power between central and state governments especially with regard to energy is confirmed in this judgment. UPSC aspirants will find it interesting to note that jurisdictional clarity and the role of the judiciary in maintaining the balance of power have been recurrent issues in civil services exams

Separation of Powers

The judgment of the court is based on federalism principles, as it strengthens the separation of powers between the central and state governments, especially in the regulation of renewable energy markets.

Balanced Power Distribution

This judgment provides both levels of government to operate under constitutionally defined spheres, maintain the balanced distribution of powers of regulations, and therefore avert overreaching the center into state jurisdiction.

Understanding Federal Structure

The case would explain to UPSC aspirants why it is important to have a federal understanding in governing India and how judicial reviews protect the autonomy and authority of state governments.

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Way Forward

It needs ensuring that the state-level regulatory commissions are adequately empowered with resources and autonomy, promoting consultation among central and state governments on policy-making for coherent frameworks, and amending the Electricity Act 2003, which contains jurisdictional roles in unambiguous terms. Moreover, there is a need for state bodies to have capacity building on the regulation of renewable energy with improvement in their skill. Continuous stakeholder engagement involving dialogue among central authorities, state commissions, industry participants, and the judiciary will address concerns and bring about alignment. This will result in balanced governance, effective regulation, and sustainable development in the renewable energy sector. 

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UPSC Practice Questions
  1. What implications does the Karnataka High Court decision to strike down the Central Green Energy Rules have on the federal structure of India? How does this affect the state and central government balance of power?
  2. Discuss the role of the judiciary in resolving conflicts arising from overlapping jurisdictions between central and state laws in India. Use the example of the Karnataka High Court verdict on Green Energy Rules to explain your answer.
  3. Discuss the jurisdictional conflict between central and state authorities in the renewable energy sector in India, which has challenged the regulatory bodies. Recommend a more coherent and integrated regulatory framework.

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