Overview

• The Supreme Court bench set aside a May 2024 Himachal Pradesh High Court verdict and restored the state's contractual right to receive 18% royalty and 18% free power from the 1,045 MW Karcham-Wangtoo project.
• Justices P S Narasimha and Joymalya Bagchi ruled that interpretation of power tariffs and supply falls exclusively under Central Electricity Regulatory Commission jurisdiction, barring high courts from altering implementation agreements.
• The 1999 Implementation Agreement stipulated a 12% royalty rate for the first 12 years of operation and an 18% rate thereafter along with a matching free power entitlement.
• JSW Hydro Energy Limited, which had reduced free power to 13% and withheld the additional 6% royalty since September 2023, must now comply with the full contractual terms.
• Himachal Pradesh officials estimate the verdict will boost state revenue by about Rs 150 crore annually and create a benchmark that could add more than Rs 250 crore per year from other mature hydro projects.