SC settles 6-decade BBMB power dispute in favour of HP, State to receive 11,973 MU over 20 yrs

Shimla, Nov 6

In a landmark ruling safeguarding Himachal Pradesh’s long-pending rights in the Bhakra-Nangal and Beas hydroelectric projects, the Supreme Court has directed Punjab and Haryana to supply 11,973 million units (MU) of electricity to Himachal Pradesh over the next 20 years, bringing an end to a decades-old dispute over the state’s share in the power generated from projects inherited from the erstwhile undivided Punjab.

The verdict gives effect to Himachal Pradesh’s 7.19 per cent entitlement in the power generated from these projects under the Punjab Reorganisation Act, 1966. The dispute concerned the state’s legitimate share in the Bhakra-Nangal and Beas projects, which came into existence before the reorganisation of Punjab and the formation of Himachal Pradesh as a full-fledged state.

The Supreme Court bench headed by Chief Justice of India Surya Kant, along with Justice Joymalya Bagchi and Justice V. Mohana, approved a mechanism for settling the accumulated power arrears. The court directed Punjab and Haryana to discharge their liabilities by supplying electricity instead of making a cash payment.

The court settled the accumulated arrears at 11,973 MU against the original assessment of 13,066 MU made by the Central Electricity Authority (CEA). The difference takes into account Himachal Pradesh’s liability towards its 7.19 per cent share of the historical capital expenditure incurred on the construction of the projects.

The liability, assessed at approximately Rs 420.77 crore, has been adjusted against the electricity dues at the rate of Rs 3.85 per unit according to Bar and Bench – Indian Legal news platform.

Under the arrangement approved by the Supreme Court, Punjab and Haryana will supply approximately 598 MU of electricity annually during the lean season from October to March over the next two decades. The settlement follows the Supreme Court’s 2011 judgment recognising Himachal Pradesh’s 7.19 per cent entitlement in the power generated from the projects. However, implementation of that judgment remained stalled for years over disagreements concerning the calculation of arrears, capital expenditure and the time frame for transferring the state’s share.

Reacting to the verdict, Chief Minister Sukhvinder Singh Sukhu described it as a major victory for Himachal Pradesh and said the state would receive its legitimate share of electricity over the next 20 years.

Addressing mediapersons at Mehla in Chamba, he said the electricity entitlement could generate annual revenue ranging from Rs 500 crore to nearly Rs 1,000 crore, depending on the rate at which the state manages to sell the power in the open market or through power purchase agreements with other states.

The Chief Minister cited the state’s recent power-sale arrangements with Rajasthan, Kerala and Tamil Nadu, where electricity was reportedly sold at rates of Rs 15.50, Rs 14.50 and Rs 13.50 per unit, respectively. He said the government would explore similar arrangements to maximise revenue from the electricity accruing to Himachal Pradesh.

Sukhu said the legal battle over the BBMB entitlement had remained pending for nearly 15 years at the implementation stage and thanked the state Cabinet, officials and legal team for pursuing the matter before the Supreme Court.

The ruling is particularly important in the context of Himachal Pradesh’s historical relationship with the Bhakra-Nangal and Beas river valley projects. Although these projects were developed before the reorganisation of Punjab, a substantial part of their infrastructure and catchment areas falls within Himachal Pradesh.

The state’s contention has been that its geographical contribution and statutory entitlement must translate into an enforceable share in the electricity generated by these projects.

The Chief Minister, however, indicated that the government’s legal efforts to secure the state’s outstanding rights would continue, particularly on the issues of water cess and the Shanan hydropower project in Jogindernagar, currently under the control of Punjab.

The Supreme Court’s latest ruling provides a concrete mechanism to implement Himachal Pradesh’s long-recognised power entitlement, turning a historical claim into a scheduled supply of electricity over the next 20 years.

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