ELECTRICITY ACT 2003

[No. 36 OF 2003] Enacted By: Parliament of India [26th May 2003] In force from June 10, 2003

An Act to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto.

(POWER GENERATION & PSM)

Pramodh Kumar Reddy, MBA (Power), B.Tech (EE)
ELECTRICITY ACT 2003

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SECTIONS PART I PART II PART III PART IV PART V PART VI PART VII PART VIII PART IX PART X PART XI PART XII PART XIII PART XIV PART XV PART XVI PART XVII PART XVIII Preliminary National Electricity Policy And Plan Generation Of Electricity Licensing Transmission Of Electricity Distribution Of Electricity Tariff Works Central Electricity Authority Regulatory Commissions Appellate Tribunal For Electricity Investigation And Enforcement Reorganization Of Board Offences And Penalties Special Courts Dispute Resolution Other Provisions Miscellaneous 1-2 3-6 7 - 11 12 - 24 25 - 41 42 - 60 61 - 66 67 - 69 70 - 75 76 - 109 110 - 125 126 - 130 131 - 134 135 - 152 153 - 157 158 159 - 165 166 - 185

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ELECTRICITY ACT 2003

SECTIONS PART I 1 2 PART II 3 4 5 6 PART III 7 8 9 10 11 PART IV 12 13 14 15 16 17 18 19 20 21 22 23 24 PART V 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

PRELIMINARY Short title, extent and commencement Definitions

National Electricity Policy And Plan

National Electricity Policy and Plan Formulation National Policy on stand-alone systems for rural areas and nonconventional energy systems National policy on electrification and local distribution in rural areas Joint responsibility of State Government and Central Government in rural electrification

Generation Of Electricity
Generating company and requirement for setting up of generating station Hydro-electric generation Captive generation Duties of generating companies Directions to generating companies

Licensing
Authorized persons to transmit, distribute, trade of electricity Power to exempt Grant of license Procedure for grant of license Condition of license Licensee not to do certain things Amendment of license Revocation of license Sale of utilities of licensees Vesting of utility in purchaser Provisions where no purchase takes place Directions to licensees Suspension of distribution license and sale of utility

Transmission Of Electricity
Inter-State, regional and inter-regional transmission National Load Dispatch Centre Constitution of Regional Load Dispatch Centre Functions of Regional Load dispatch Centre Compliance of directions Transmission within a State Constitution of State Load dispatch Centres Functions of State Load Dispatch Centres Compliance of directions Grid Standards Intervening transmission facilities Charges for intervening transmission facilities Directions by Appropriate Government Central Transmission Utility and functions State Transmission Utility and functions Duties of transmission licensees Other business of transmission licensee
ELECTRICITY ACT 2003

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PART VI 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 PART VII 61 62 63 64 65 66 PART VIII 67 68 69 PART IX 70 71 72 73 74 75 PART X 76 77 78 79 80 81 82 83 84 85

Distribution Of Electricity
Duties of distribution licensee and open access Duty to supply on request Exceptions from duty to supply electricity Power to recover charges Power to recover expenditure Power to require security Additional terms of supply Agreement with respect to supply or purchase of electricity The Electricity Supply Code Other businesses of distribution licensees Provisions with respect to electricity traders Provisions relating to safety and electricity supply Control of transmission and use of electricity Use of meters Disconnection of supply in default of payment Consumer Protection: Standards of performance of licensee Different standards of performance by licensee Information with respect to levels of performance Market domination

Tariff
Tariff regulations Determination of tariff Determination of tariff by bidding process Procedure for tariff order Provision of subsidy by State Government Development of market

Works Provisions as to opening up of streets, railways, etc.

Provisions relating to Overhead lines Notice to telegraph authority

Central Electricity Authority

Constitution of Central Electricity Authority Members not to have certain interest Officers and staff of Authority Functions and duties of Authority Power to require statistics and returns Directions by Central Government to Authority

Regulatory Commissions
Constitution of Central Commission Qualifications for appointment of Members of Central Commission Constitution of Selection Committee to recommend Members Functions of Central Commission Central Advisory Committee Objects of Central Advisory Committee Constitution of State Commission Joint Commission Qualifications for appointment of Chairperson and Members of State Commission Constitution of Selection Committee to select Members of State Commission
ELECTRICITY ACT 2003

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86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 PART XI 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 PART XII 126 127 128 129 130

Functions of State Commission State Advisory Committee Objects of State Advisory Committee Term of office and conditions of service of Members Removal of Member Secretary, officers and other employees of Appropriate Commission Proceedings of Appropriate Commission Vacancies not to invalidate proceedings Powers of Appropriate Commission Proceedings before Commission Powers of entry and seizure Delegation Grants and loans by Central Government Establishment of Fund by Central Government Accounts and audit of Central Commission Annual Report of Central Commission Grants and Loans by State Government Establishment of Fund by State Government Accounts and audit of State Commission Annual Report of State Commission Budget of Appropriate Commission Directions by Central Government Directions by State Government Directions to Joint Commission

Appellate Tribunal For Electricity

Establishment of Appellate Tribunal Appeal to Appellate Tribunal Composition of Appellate Tribunal Qualification for appointment of Chairperson and Members of Appellate Tribunal Term of Office Terms and conditions of service Vacancies Resignation and Removal Member to act as Chairperson in certain circumstances Officers and other employees of Appellate Tribunal Procedure and powers of Appellate Tribunal Power of Appellate Tribunal Distribution of business amongst Benches and transfer of cases from one Bench to another Bench Decision to be by majority Right of appellant to take assistance of legal practitioner and of Appropriate Commission to appoint presenting officers Appeal to Supreme Court

Investigation And Enforcement

Assessment Appeal to Appellate Authority Investigation of certain matters Orders for securing compliance Procedure for issuing directions by Appropriate Commission
ELECTRICITY ACT 2003

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PART XIII 131 132 133 134 PART XIV 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 PART XV 153 154 155 156 157 PART XVI 158 PART XVII 159 160 161 162 163 164 165
PART XVIII

Reorganization Of Board
Vesting of property of Board in State Government Use of proceeds of sale or transfer of Board Provisions relating to officers and employees Payment of compensation or damages on transfer

Offences And Penalties

Theft of Electricity Theft of electric lines and materials Punishment for receiving stolen property Interference with meters or works of licensee Negligently breaking or damaging works Penalty for intentionally injuring works Extinguishing public lamps Punishment for non-compliance of directions by Appropriate Commission Power to adjudicate Factors to be taken into account by adjudicating officer Civil courts not to have jurisdiction Punishment for non-compliance of orders or directions Penalties not to affect other liabilities Penalty where works belong to Government Offences by companies Abetment Cognizance of offences Compounding of offences

Special Courts
Constitution of Special Courts Procedure and power of Special Court Special Court to have powers of Court of Session Appeal and revision Review

Dispute Resolution
Arbitration

Other Provisions
Protection of railways, highways, airports and canals, docks, wharfs and piers Protection of telegraphic, telephonic and electric signaling lines Notice of accidents and injuries Appointment of Chief Electrical Inspector and Electrical Inspector Power for licensee to enter premises and to remove fittings or other apparatus of licensee Exercise of powers of Telegraph Authority in certain cases Amendment of sections 40 and 41 of Act 1 of 1894

Miscellaneous
Coordination Forum Exemption of electric lines or electrical plants from attachment in certain cases Protection of action taken in good faith Members, officers, of Appellate Tribunal, Appropriate Commission to be public servants Recovery of penalty payable under this Act Services of notices, orders or documents Transitional provisions Inconsistency in laws
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166 167 168 169 170 171 172 173

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174 175 176 177 178 179 180 181 182 183 184 185

Act to have overriding effect Provisions of this Act to be in addition to and not in derogation of other laws Power of Central Government to make rules Powers of Authority to make regulations Powers of Central Commission to make regulations Rules and regulations to be laid before Parliament Powers of State Governments to make rules Powers of State Commissions to make regulations Rules and regulations to be laid before State Legislature Power to remove difficulties Provisions of the Act not to apply in certain cases Repeal and saving

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ELECTRICITY ACT 2003

DEFINITIONS PART I (Section 2)

1 2 3

PRELIMINARY
The Central Government shall, by notification, establish an Appellate Tribunal to be known as the Appellate Tribunal for Electricity to hear appeals against the orders of the adjudicating officer or the Appropriate Commission under this Act. Such date as the Central Government may, by notification, appoint. The area within which a distribution licensee is authorized by his license to supply electricity Central Electricity Regulatory Commission to exercise the powers conferred on, and discharge the functions assigned to it under this Act. Every State Government shall, within six months from the appointed date, by notification, constitute for the purposes of this Act, a Commission for the State to be known as the (name of the State) Electricity Regulatory Commission. A Joint Commission may be constituted by an agreement to be entered into (a) by two or more Governments of States; or (b) by the Central Government, in respect of one or more Union territories, and one or more Governments of States, (a) The Central Government, In respect of a generating company wholly or partly owned by it; In relation to any inter-State generation, transmission, trading or supply of electricity and with respect to any mines, oil-fields, railways, national highways, airports, telegraphs, broadcasting stations and any works of defence, dockyard, nuclear power installations; In respect of National Load Dispatch Centre; and Regional Load Dispatch Centre; In relation to any works or electric installation belonging to it or under its control ; (b) In any other case, the State Government, having jurisdiction under this Act There shall be a body to be called the Central Electricity Authority to exercise such functions and perform such duties as are assigned to it under this Act. A State Electricity Board, constituted before the commencement of this Act, under sub-section (1) of section 5 of the Electricity (Supply) Act, 1948. A power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by any co-operative society or association of persons for generating electricity primarily for use of members of such cooperative society or association. There shall be a Commission to be known as the Central Electricity Regulatory Commission to exercise the powers conferred on, and discharge the functions assigned to it under this Act. The Central Government may notify any Government company as the Central Transmission Utility: Provided that the Central Transmission Utility shall not engage in the business of generation or trading in electricity. The Chairperson of the Authority or Appropriate Commission or the Appellate Tribunal, as the case may be. A process which simultaneously produces two or more forms of useful energy (including electricity). A company formed and registered under the Companies Act, 1956 and includes any-body corporate under a Central, State or Provincial Act. Any reduction in consumption of electricity as a result of increase in the
ELECTRICITY ACT 2003

Appellate Tribunal Appointed Date Area of Supply

Appropriate Commission

Appropriate Government

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Authority Board Captive Generating Plant Central Commission Central Transmission Utility Chairperson Cogeneration Company Conservation

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11 12 13 14

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Consumer

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Dedicated Transmission Lines Distribution Licensee Distributing Main Distribution System

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19

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Electric Line

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Electrical Inspector

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Electrical Plant

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Electricity

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Electricity Supply Code

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Electricity System

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ELECTRICITY ACT 2003

efficiency in supply and use of electricity Any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be Any electric supply-line for point to point transmission which are required for the purpose of connecting electric lines or electric plants of a captive generating plant referred to in [Section 9] or generating station referred to in section 10 to any transmission lines or sub-stations or generating stations, or the Load Centre, as the case may be. A licensee authorized to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply. The portion of any main with which a service line is, or is intended to be, immediately connected. The system of wires and associated facilities between the delivery points on the transmission lines or the generating station connection and the point of connection to the installation of the consumers. Any line which is used for carrying electricity for any purpose and includes (a) Any support for any such line, that is to say, any structure, tower, pole or other thing in, on, by or from which any such line is, or may be, supported, carried or suspended, and (b) Any apparatus connected to any such line for the purpose of carrying electricity. The Appropriate Government may, by notification, appoint duly qualified persons to be Chief Electrical Inspector or Electrical Inspectors under subsection (1) of [Section 162]. Any plant, equipment, apparatus or appliance or any part thereof used for, or connected with, the generation, transmission, distribution or supply of electricity but does not include(a) An electric line, (b) A meter used for finding the quantity of electricity supplied to any premises, (c) An electrical equipment, apparatus or appliance under the control of a consumer. Means Electrical Energy (a) generated, transmitted, supplied or traded for any purpose, or (b) Used for any purpose except the transmission of a message. The State Commission shall specify an electricity supply code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity; measures for preventing tampering, distress or damage to electrical plant, or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter; entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters. [Section 50] A system under the control of a generating company or licensee, as the case may be, having one or more (a) generating stations, (b) transmission lines, (c) electric lines and sub-stations,

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Electricity Trader Franchisee Generating Company Generate

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Generating Station

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Government Company

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Grid

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Grid Code

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Grid Standards High Voltage Line

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36

Inter-State Transmission System

and when used in the context of a State or the Union, the entire electricity system within the territories thereof A person who has been granted a licence to undertake trading in electricity under [Section 12] A persons authorized by a distribution licensee to distribute electricity on its behalf in a particular area within his area of supply. Any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, which owns or operates or maintains a generating station. To produce electricity from a generating station for the purpose of giving supply to any premises or enabling a supply to be so given. Any station for generating electricity, including any building and plant with stepup transformer, switchgear, switch yard, cables or other appurtenant equipment, if any, used for that purpose and the site thereof; a site intended to be used for a generating station, and any building used for housing the operating staff of a generating station, and where electricity is generated by water-power, includes penstocks, head and tail works, main and regulating reservoirs, dams and other hydraulic works, but does not in any case include any sub-station. Any company in which not less than fifty one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary of a Government company as thus defined. [Section 617] of the Companies Act, 1956 The high voltage backbone system of inter-connected transmission lines, substations and generating plants Is a regulation made by the Central Commission in exercise of powers under clause (h) of subsection (1) of [Section 79] The Indian Electricity Grid Code (IEGC) lays down the rules, guidelines and standards to be followed by the various agencies and participants in the system to plan, develop, maintain and operate the power system, in the most efficient, reliable, economic and secure manner, while facilitating healthy competition in the generation and supply of electricity. The Authority shall perform such functions and duties as the Central Government may prescribe or direct, and in particular to Specify the Grid Standards for operation and maintenance of transmission lines. An electric line or cable of a nominal voltage as may be specified by the Authority from time to time. 1. Any system for the conveyance of electricity by means of main transmission line from the territory of one State to another State, 2. The conveyance of electricity across the territory of an intervening State as well as conveyance within the State which is incidental to such inter-State transmission of electricity, 3. The transmission of electricity within the territory of a State on a system built, owned, operated, maintained or controlled by a Central Transmission Utility. Any system for transmission of electricity other than an inter-State transmission system.
ELECTRICITY ACT 2003

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Intra-State Transmission System

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Licence

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Licensee Line

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41

Local Authority

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Main Member National Electricity Plan National Load Dispatch Centre Notification Open Access Overhead Line Person

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45

46

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48 49

50

Power System

A licence granted under [section 14]The Appropriate Commission may grant a licence to any person a) to transmit electricity as a transmission licensee; or b) to distribute electricity as a distribution licensee; or c) to undertake trading in electricity as an electricity trader, in any area as may be specified in the licence: A person who has been granted a licence under [section 14] Any wire, cable, tube, pipe, insulator, conductor or other similar thing (including its casing or coating) which is designed or adapted for use in carrying electricity and includes any line which surrounds or supports, or is surrounded or supported by or is installed in close proximity to, or is supported, carried or suspended in association with, any such line. Any Nagar Panchayat, Municipal Council, municipal corporation, Panchayat constituted at the village, intermediate and district levels, body of port commissioners or other authority legally entitled to, or entrusted by the Union or any State Government with, the control or management of any area or local fund. Any electric supply- line through which electricity is, or is intended to be, supplied. The Member of the Appropriate Commission or Authority or Joint Commission, or the Appellate Tribunal, as the case may be, and includes the Chairperson of such Commission or Authority or Appellate Tribunal. The National Electricity Plan notified under sub-section (4) of [section 3]. The Authority shall prepare a National Electricity Plan in accordance with the National Electricity Policy and notify such plan once in five years The Centre established under subsection (1) of [section 26] The Central Government may establish a Centre at the national level, to be known as the National Load Dispatch Centre for optimum scheduling and dispatch of electricity among the Regional Load Dispatch Centres. Notification published in the Official Gazette and the expression notify shall be construed accordingly. The non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission. An electric line which is placed above the ground and in the open air but does not include live rails of a traction system. Shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person. All aspects of generation, transmission, distribution and supply of electricity and includes one or more of the following, namely:a) Generating Stations b) Transmission Or Main Transmission Lines c) Sub-Stations d) Tie-Lines e) Load Dispatch Activities f) Mains Or Distribution Mains g) Electric Supply-Lines h) Overhead Lines i) Service Lines j) Works
ELECTRICITY ACT 2003

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51 52 53 54

Premises Prescribed Public Lamp Real Time Operation Regional Power Committee Regional Load Dispatch Centre Regulations Repealed Laws Rules Schedule

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56

57 58 59 60

61

Service-Line

62 63

Specified Stand Alone System State Commission

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65

State Grid Code

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State Load Dispatch Centre State Transmission Utility Street

Includes any land, building or structure. Means prescribed by rules made by the Appropriate Government under this Act. An electric lamp used for the lighting of any street. Means action to be taken at a given time at which information about the electricity system is made available to the concerned Load Dispatch Centre. A committee established by resolution by the Central Government for a specified region for facilitating the integrated operation of the power systems in that region. The Centre established under subsection (1) of [section 27] The Central Government shall establish a Centre for each region to be known as the Regional Load Dispatch Centre having territorial jurisdiction as determined by the Central Government in accordance with section 25 for the purposes of exercising the powers and discharging the functions under this Part. Means regulations made under this Act. The Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998 repealed by [section 185] Means rules made under this Act. Means the Schedule to this Act. Any electric supply-line through which electricity is, or is intended to be, supplied a) To a single consumer either from a distributing main or immediately from the Distribution Licensee's premises; or b) From a distributing main to a group of consumers on the same premises or on contiguous premises supplied from the same point of the distributing main. Means specified by regulations made by the Appropriate Commission or the Authority, as the case may be, under this Act. The electricity system set-up to generate power and distribute electricity in a specified area without connection to the grid. The State Electricity Regulatory Commission constituted under sub-section (1) of [section 82] and includes a Joint Commission constituted under sub-section (1) of [section 83]. [Section 86 (h)] Act require the state electricity regulatory commission to specify state grid code consistent with the grid code specified under clause(h) of sub section (1) of [section 79] i.e. Indian Electricity Grid Code specified by CERC. The State Grid Code lays down the rules, guidelines and standards to be followed by various agencies and participants in the intra-State transmission system to plan, develop, maintain and operate the intra-State transmission system, a part of Southern Region Grid System, in the most efficient, reliable and economic manner, while facilitating a healthy competition in the generation and supply of electricity. The State Government shall establish a Centre to be known as the State Load Dispatch Centre for the purposes of exercising the powers and discharging the functions under this Part. The State Government may notify the Board or a Government company as the State Transmission Utility under sub-section (1) of [section 39]. Includes any way, road, lane, square, court, alley, passage or open space, whether a thoroughfare or not, over which the public have a right of way, and

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ELECTRICITY ACT 2003

69 70 71

Sub-Station Supply Trading

72

Transmission Lines

also the roadway and footway over any public bridge or causeway. A station for transforming or converting electricity for the transmission or distribution thereof and includes transformers converters, switch-gears, capacitors, synchronous condensers, structures, cable and other belonging equipment and any buildings used for that purpose and the site thereof. In relation to electricity, means the sale of electricity to a licensee or consumer. Purchase of electricity for resale thereof and the expression "trade" shall be construed accordingly. All high pressure cables and overhead lines (not being an essential part of the distribution system of a licensee) transmitting electricity from a generating station to another generating station or a substation, together with any step-up and step-down transformers, switch-gear and other works necessary to and used for the control of such cables or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switch-gear and other works. Means a licensee authorized to establish or operate Transmission Lines. Means conveyance of electricity by means of transmission lines and the expression "transmission" shall be construed accordingly. The electric lines or electrical plant, and includes all lands, buildings, works and materials attached thereto belonging to any person acting as a generating company or licensee under the provisions of this Act. Means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the case may be, are used by another person for the conveyance of electricity on payment of charges to be determined under [section 62] Includes electric line, and any building, plant, machinery, apparatus and any other thing of whatever description required to transmit, distribute or supply electricity to the public and to carry into effect the objects of a licence or sanction granted under this Act or any other law for the time being in force.

73 74 75

Transmission Licensee Transmit Utility

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Wheeling

77

Works

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ELECTRICITY ACT 2003

Most Important Sections of Electricity Act 2003

Sections

Role of Government 3 Central Government to prepare National Electricity Policy and Tariff Policy. Central Govt. to notify a National Policy for rural areas permitting stand-alone systems based on 4 renewal and Non-Conventional energy sources in consultation with States. Central Govt. to formulate a National Policy in consultation with the concerned State Govts. for 5 bulk purchase of power and management of local distribution through Users Association, Cooperatives, Franchisees and Panchayat Institutions etc. Rural Electrification 6 Appropriate Govt to endeavor to extend supply of electricity to all villages/hamlets. Central Govt. to notify a National Policy for rural areas permitting stand-alone systems based on 4 renewal and Non-Conventional energy sources in consultation with States. 14 No requirement of licence if a person intends to generate and distribute power in rural area. Generation 7 Generation free from licensing. 7 Requirement of TEC for non-hydro generation done away with. Captive Generation is free from controls. Open access to Captive generating plants subject to 9 availability of transmission facility. Clearance of CEA for hydro projects required. Necessary due to concern of dam safety and inter8 State issues. Generation from Non-Conventional Sources / Co-generation to be promoted. Minimum 61(h), percentage of purchase of power from renewables may be prescribed by Regulatory 86(1)(e) Commissions. Transmission There would be Transmission Utility at the Centre and in the States to undertake planning & 38&39 development of transmission system. Load dispatch to be in the hands of a govt company/organization. Flexibility regarding keeping 26, Transmission Utility and load dispatch together or separating them. Load Dispatch function 27,31, critical for grid stability and neutrality Vis a Vis generators and distributors. Instructions to be 38, 39 binding on both. Transmission companies to be licensed by the Appropriate Commission after giving due 15(5)(b) consideration to the views of the Transmission Utility.
27, 31, 38, 39,41 38-40

The Load Dispatch Centre/Transmission Utility / Transmission Licensee not to trade in power. Facilitating genuine competition between generators Open access to the transmission lines to be provided to distribution licensees, generating companies. This would generate competitive pressures and lead to gradual cost reduction.

Distribution Distributions to be licensed by SERCs. Distribution licensee free to take up generation & Generating co. Free to take up distribution 7, 12 licence. This would facilitate private sector participation without Government guarantee/ Escrow. 62 Retail tariff to be determined by the Regulatory Commission. 55 Metering made mandatory.
ELECTRICITY ACT 2003

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19, 24 42 42

Provision for suspension/revocation of licence by Regulatory Commission as it is an essential service which cannot be allowed to collapse. Open access in distribution to be allowed by SERC in phases. In addition to the wheeling charges provision for surcharge if open access is allowed before elimination of cross subsidies, to take care of (a) Current level of cross subsidy (b) Licensees obligation to supply. This would give choice to customer.

Consumer Protection 43(1) Consumer to be given connection within stipulated time. 43(3) Penalty in the event of failure to give connection. 47(4) Payment of interest on security deposit. 50 Regulatory commission to specify Electricity supply code to be followed by licensees. No sum due from consumers recoverable after a period of two years unless the same was shown 56(2) recoverable continuously. Redressal forum for redressal of grievances of consumers, to be appointed by every distribution 42 licensee within six months. Ombudsman scheme. Standards of performance Licensees required to meet standards of performance specified by Regulatory 57 Commission. Failure to meet standards makes them liable to pay compensation to affected person within ninety days. Licensee to furnish to the Commission periodical information on standards of performance. District level committee - (a) to coordinate and review extension of electrification in each 166 (5) district; (b) to review quality of power supply and consumer satisfaction, etc. Trading/ Market Development 12 Trading distinct activity permitted with licensing.
79 (2)(b) & 86(2) (b)v 66

Regulatory Commission may fix ceiling on trading margin to avoid artificial price volatility. The Regulatory Commission to promote development of market including trading.

Regulatory Commissions/Appellate Tribunal 82 State Electricity Regulatory Commission to be constituted within six months. 83 Provision for Joint Commission by more than one State/UT. 110,112 Provision for constitution of Appellate Tribunal consisting of Chairman and three Members. Appellate Tribunal to hear appeals against the orders of CERC/SERC, and also to exercise general 111 supervision and control over the Central/State Commissions. 125 Appeal against the orders of Appellate Tribunal to lie before the Supreme Court. Appellate Tribunal considered necessary to Reduce litigation and delay in decisions through High Court. Provide technical expertise in decision on appeals. Central Electricity Authority CEA to continue as the main technical Advisor of the Govt. of India/ State Government with the 70 responsibility of overall planning. 73 CEA to specify the technical standards for electrical plants and electrical lines. 73 CEA to be technical adviser to CERC as well as SERCs. 53 CEA to specify the safety standards.

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ELECTRICITY ACT 2003

Tariff Principles Regulatory Commission to determine tariff for supply of electricity by generating co. on long/medium term contracts. 62 No tariff fixation by regulatory commission if tariff is determined through competitive bidding or where consumers, on being allowed open access enter into agreement with generators/traders. 61 (g), Consumer tariff should progressively reduce cross subsidies and move towards actual cost of (h) supply. State Government may provide subsidy in advance through the budget for specified target 65 groups if it requires the tariff to be lower than that determined by the Regulatory Commission. 61 (e), Regulatory Commissions may undertake regulation including determination of multi-year tariff (f) principles, which rewards efficiency and is based on commercial principles. Regulatory Commission to look at the costs of generation, transmission and distribution 62 (2) separately. Tariff Principles 126,135 Focus on revenue realization rather than criminal proceedings. Penalties linked to the connected load and quantum of energy and financial gain involved in 135 theft. 152 Provisions for compounding of offences. Assessment of electricity charges for unauthorized use of electricity by the assessing officer 126 designated by the State Government. 135 Theft punishable with imprisonment. 150 Punishment provision for abetment of theft. 153-158 Special Courts Restructuring of SEBs 131 Provision for transfer scheme to create one or more companies from SEB. 172 Provision for continuance of SEBs. States has given flexibility to adopt reform model/path. New Central Law vis a vis State Reform / Amendment Laws All licenses, authorizations, permissions, approvals, clearances issued under the repealed laws 172(b) are saved for a maximum period of one year. Action taken under corresponding provisions of the repealed laws or rules made there under are 185 (2) saved to the extent of consistency/correspondence with the provisions of the new Act. Provisions of State Reform laws not inconsistent with provisions of the new Central law will 185(3) continue to apply in that State. State Governments can defer implementation of the new Act by a maximum period of six 172(d) months.

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ELECTRICITY ACT 2003