Shimla, July 17 —Supreme Court has directed JSW Energy to pay 18% royalty to the Himachal Pradesh government from its 1,045 MW Karcham-Wangtoo hydroelectric project in Kinnaur district, reversing an earlier High Court order that had capped the royalty at 12%.
“This is a big win for Himachal Pradesh and its people,” said a government spokesperson, confirming that the revised royalty rate will bring an additional ₹150 crore annually to the state’s coffers. Over time, the ruling is expected to add over ₹250 crore per year in revenue from other similar hydro projects that have completed their initial 12-year concession period.
The Supreme Court’s order overturns the Himachal Pradesh High Court’s May 2024 judgment, which had sided with JSW Energy and allowed it to continue paying only 12% royalty beyond the initial period. The top court ruled that the company must now comply with the original terms of the 1999 agreement, which mandated 12% royalty for the first 12 years and 18% for the remaining 28 years of the project’s 40-year life cycle.
The Karcham-Wangtoo plant began operations in September 2011, and JSW Energy had paid 12% royalty up to September 2023. However, it refused to raise the rate to 18% thereafter, leading to a legal standoff with the state.
“This issue was taken up personally by Chief Minister Sukhvinder Singh Sukhu, who made a committed push to uphold the state’s rights over its natural resources,” said the spokesperson. “The decision not only strengthens Himachal’s financial position but ensures that its people directly benefit from its resources.”
Advocate General Anup Rattan, who represented the state, said the apex court’s verdict clarified that the contractual obligations of the power company supersede interpretations by the electricity regulatory authority. “JSW Energy had unilaterally stopped paying the 18% royalty after the High Court order. The Supreme Court has now rectified that.”
He added that the state will now initiate the process to recover the pending balance from JSW Energy as per the ruling.
The verdict is expected to serve as a precedent for other hydro projects operating under similar terms in Himachal Pradesh.
