APTEL Held That Commissions Cannot Invoke Section 11(2) To Address Future Financial Impacts Under Section 11(1) Of The Electricity Act

The Appellate Tribunal for Electricity ("APTEL"), through its Order dated 31.10.2025 in Gujarat Urja Vikas Nigam Limited v. CERC & Ors.¹ held that the jurisdiction of an appropriate commission under Section 11(2) of the Electricity Act, arises only after a generating company has actually suffered an adverse financial impact pursuant to directions issued under Section 11(1) of the Electricity Act.

APTEL clarified that anticipation of future losses cannot justify the exercise of such jurisdiction. It emphasized that the existence of an actual adverse financial impact is a sine qua non for invoking Section 11(2). Therefore, when a Petition is filed by a generating company under Section 11(2) of the Electricity Act, the appropriate commission must first ascertain whether the directions under Section 11(1) of the Electricity Act have caused any adverse financial impact.