Delhi: SC clears path for WtE plant in Narela-Bawana
The judgment addresses a significant legal question about MCD’s authority to set tariffs for electricity generated by its WtE plants
The Supreme Court on Thursday upheld the Municipal Corporation of Delhi’s authority to set tariffs for its proposed waste-to-energy plant in Narela-Bawana, clearing the way for the city’s fifth such facility aimed at tackling 3,000 tonnes of untreated waste generated daily.
The judgment addresses a significant legal question about MCD’s authority to set tariffs for electricity generated by its WtE plants, an issue contested under the Electricity Act, but one that also comes in the midst of concerns over the environmental harm these plants may be creating.
A bench of justices Bhushan R Gavai and KV Viswanathan overturned the Appellate Tribunal for Electricity’s (APTEL) August 2023 decision that had rejected the Delhi Electricity Regulatory Commission’s (DERC) approval of a ₹7.38 per kWh tariff for electricity generated by the WtE plant.
APTEL had previously held that MCD, not being a power-generating company, lacked statutory authority to fix tariffs under Section 63 of the Act.
However, the Supreme Court clarified that MCD fulfilled its statutory duty by seeking DERC’s approval for the bidding process and draft power purchase agreement, emphasising the “larger public interest” at stake.
“The APTEL also failed to take into consideration that the WtE project in question was in the larger public interest thereby providing for disposal of the huge quantity of waste generated in the city of Delhi,” the bench declared.
The judgment highlighted that MCD is mandated under the Solid Waste Management Rules, 2016, to construct, operate and maintain solid waste processing facilities. “It could thus be seen that the SWM Rules 2016 require that, while making provisions for solid waste disposal, the authorities shall give preference to decentralized processing to minimize transportation cost and environmental impacts,” the court held.
Delhi’s pollution regulatory body in the past has fined these WtE facilities for flouting air pollution norms. Residents have held protests alleging that they were adding toxins to their air and they have been the subject of several legal challenges. A New York Times investigative report on November 12 titled “Is a ‘Green’ Revolution Poisoning India’s Capital?” focusing on the Okhla plant found that the facility was releasing smoke containing lead, arsenic and other toxic substances into surrounding neighbourhoods.
Barring the newest addition at Tehkhand, which was inaugurated in October 2022, all other three facilities have been fined in the past by the Delhi Pollution Control Committee for not meeting pollution norms. The WtE plant at Ghazipur was also shut for more than seven months in 2022 with old machinery needing upgrade. In February 2017, the Okhla WtE was fined ₹25 lakh by the National Green Tribunal on a petition filed by Sukhdev Vihar residents.
Currently, MCD operates WtE plants at Okhla, Tehkhand, Ghazipur and Bawana. The Supreme Court’s ruling removes a significant hurdle in developing the Narela-Bawana plant by enhancing its financial viability through tariff-setting powers.
The bench noted that APTEL erred in interpreting Section 63 of the Act by holding that only discoms or generating companies could approach DERC for tariff fixation. The court pointed out that the APTEL order imposed “unnecessary restrictions” when the legislature intended to empower the commission to adopt tariffs determined through transparent bidding.
“We are, therefore, of the considered view that the powers of the state commission cannot be curtailed by interpreting that the same can be invoked only by the discoms or the generating companies,” it held.
The court also highlighted Delhi’s growing waste management crisis. The city generates approximately 11,000 tonnes of solid waste daily, with a shortfall in processing 3,000 tonnes. An additional 800 tonnes are illegally dumped at sites like Ghazipur and Bhalswa, posing severe environmental and public health risks.
The decision aligns with the court’s consistent concern over Delhi’s waste management. On December 19, a separate bench criticized the Delhi government and MCD for failing to comply with the Solid Waste Management Rules, describing the situation as “shameful” and “shocking.”
However, the project still needs approval from MCD’s standing committee, which hasn’t been constituted due to a disputed September 27 election for its sixth member. Delhi mayor Shelly Oberoi has challenged the election in the Supreme Court, questioning lieutenant governor VK Saxena’s invocation of Section 487 of the Delhi Municipal Corporation Act.
While admitting Oberoi’s petition on October 4, the court asked the LG not to proceed with the standing committee chairman’s election until further orders. On December 13, Oberoi requested the court to allow the Delhi assembly to address urgent waste management issues without a functioning standing committee, but the plea was declined.
