New Delhi, April 2 -- The Supreme Court has underscored that India's transition to non-fossil fuel energy is not merely a matter of policy choice but a "fundamental necessity" tied to environmental protection, even as it emphasised that electricity regulators must exercise their powers in a coordinated and purposive manner aligned with broader statutory and policy objectives. A bench of justices PS Narasimha and Atul S Chandurkar laid down the contours of regulatory power under the Electricity Act, stressing that tariff determination, while the exclusive domain of electricity regulatory commissions, cannot be undertaken in isolation from national energy and environmental goals. At the heart of the ruling was a clear message that regulatory commissions are not siloed authorities but key institutional actors tasked with balancing competing public interests, including energy security, consumer welfare, investor stability and environmental sustainability. "Tariff determination must.be the exclusive province of (electricity regulatory commissions)," held the court, but added that such power must be exercised "in consonance with statutory policy" and in recognition of the purpose underlying governmental measures such as incentives for renewable energy. The judgment arose from a dispute over whether generation-based incentives (GBI) granted by the Union government to promote renewable energy could be factored into tariff determination by state regulators. While resolving that issue, the court used the occasion to articulate broader principles governing regulatory conduct in the electricity sector. The bench highlighted that schemes like the GBI are not merely financial tools but are rooted in India's larger commitment to transition away from fossil fuels. It noted that such incentives are designed to "subserve a very important policy consideration" relating to energy security and the shift towards renewable energy, a transition necessitated by environmental concerns including global warming. In its judgment, the court held last week, "By shifting towards renewable energy sources, we enhance our energy security, reduce reliance on volatile fossil fuel markets and mitigate the risks associated with energy scarcity. Also, the adoption of renewable energy technologies helps in curbing air pollution, thereby improving public health and reducing healthcare costs."...