CSERC Clarifies Tariff Rules On Zero Contract Demand, Restores Industrial HV-4 Category in Chhattisgarh

The Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued an important order in Petition No. 55 of 2025 regarding the tariff classification of an industrial consumer that reduced its contract demand to zero. The case was filed by M/s Real Ispat & Energy Pvt. Ltd., an integrated steel plant located in Baloda Bazar district, against the state distribution company, Chhattisgarh State Power Distribution Company Limited (CSPDCL).

The dispute started after the company commissioned a 20 MW Waste Heat Recovery Boiler (WHRB) captive power plant. After setting up the captive unit, the company reduced its contract demand with CSPDCL from 1000 KVA to zero in September 2024. Following this change, CSPDCL reclassified the plant from the “HV 4-Steel Industries” category to the “HV 7-Start-up Power” category.

CSPDCL argued that the HV-4 category applies only to industries with active contract demand for manufacturing activities. According to the utility, once the contract demand was reduced to zero, the consumer could not remain under the industrial tariff category. It further stated that the HV-7 category is meant for generating stations that draw electricity from the grid for start-up or standby purposes.

However, the petitioner challenged this decision. The company stated that it continues to operate as a steel manufacturing unit and remains an industrial consumer, even after installing a captive power plant. It argued that the HV-7 tariff is specifically designed for generators during start-up, whereas it draws grid power only as a standby supply to maintain production when its captive plant is not generating sufficient electricity.

While examining the matter, the Commission first rejected CSPDCL’s objection on maintainability. It clarified that the issue was not a simple billing dispute but related to proper tariff categorization. The Commission also observed that the petitioner’s captive plant is not a conventional thermal power plant that requires separate start-up power. Instead, it generates electricity by using hot flue gases from its sponge iron kiln.

The Commission concluded that the HV-7 start-up tariff is meant only for a limited duration required to start a generator and cannot be applied to regular industrial load. Since the petitioner is a legally agreed-upon consumer, treating its power drawal as “eventual drawal” under the generator category was found to be incorrect.

Accordingly, CSERC directed CSPDCL to restore the company’s classification under the “HV 4-Steel Industries” category. The utility has also been ordered to revise all monthly energy bills issued from September 1, 2024, and apply standby charges as per the applicable tariff orders for any power drawn under the zero contract demand arrangement.