The Electricity Act, 2003
The Electricity Act, 2003 introduces the framework for transmission licensees and states the functions of central transmission utility (CTU) and state transmission utility (STU). It also describes the functions entrusted upon Central Electricity Regulatory Commission (CERC), Central Electricity Authority (CEA) and load dispatch centres (LDCs) at state and central level for the development of transmission system in the country.
The Electricity Act, 2003
Objectives
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, rationalisation 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
Licensing
1. The Appropriate Commission may, on application made to it grant any person licence to transmit electricity as a transmission licensee
2. The Central Transmission Utility or the State Transmission Utility shall be deemed to be a transmission licensee
3. In case an Appropriate Government transmits electricity, whether before or after the commencement of this Act, such Government shall be deemed to be a licensee
under this Act, but shall not be required to obtain a licence under this Act
[Section 14]
2. The Central Transmission Utility or the State Transmission Utility shall be deemed to be a transmission licensee
3. In case an Appropriate Government transmits electricity, whether before or after the commencement of this Act, such Government shall be deemed to be a licensee
under this Act, but shall not be required to obtain a licence under this Act
[Section 14]
Grant of License
1. A person intending to act as a transmission licensee shall, immediately on making the application, forward a copy of such application to the Central Transmission Utility or the State Transmission Utility
2. The Central Transmission Utility or the State Transmission Utility, shall, within thirty days after the receipt of the copy of the application send its recommendations, if any, to the Appropriate Commission
3. The Appropriate Commission shall, as far as practicable, within ninety days after receipt of such application:
a) issue a licence
b) reject the application for reasons to be recorded in writing
4. The Appropriate Commission shall, immediately after issue of licence, forward a copy of the licence to the Appropriate Government , Authority, local authority, etc
5. A licence shall continue to be in force for a period of twenty five years unless such licence is revoked
6. No licensee shall at any time assign his licence or transfer his utility, or any part thereof, by sale, lease , exchange or otherwise without the prior approval of the Appropriate Commission
[section 15]
2. The Central Transmission Utility or the State Transmission Utility, shall, within thirty days after the receipt of the copy of the application send its recommendations, if any, to the Appropriate Commission
3. The Appropriate Commission shall, as far as practicable, within ninety days after receipt of such application:
a) issue a licence
b) reject the application for reasons to be recorded in writing
4. The Appropriate Commission shall, immediately after issue of licence, forward a copy of the licence to the Appropriate Government , Authority, local authority, etc
5. A licence shall continue to be in force for a period of twenty five years unless such licence is revoked
6. No licensee shall at any time assign his licence or transfer his utility, or any part thereof, by sale, lease , exchange or otherwise without the prior approval of the Appropriate Commission
[section 15]
Inter-State, Regional, Inter-regional
The Central Government may, make regionwise demarcation of the country, and, from time to time, make such modifications therein as it may consider necessary for the efficient, economical and integrated transmission and supply of electricity, and in particular to facilitate voluntary interconnections and co-ordination of facilities for the inter-State, regional and interregional generation and transmission of electricity
[section 25]
[section 25]
National Load Dispatch Centre
1. The Central Government may establish a centre at the national level, to be known as the National Load Despatch Centre for optimum scheduling and despatch of electricity among the Regional Load Despatch Centres
2. The National Load Despatch Centre shall not engage in the business of trading in electricity
[section 26]
2. The National Load Despatch Centre shall not engage in the business of trading in electricity
[section 26]
Constitution & Functions of Regional Load Dispatch Centres
1. The Central Government shall establish a centre for each region to be known as the Regional Load Despatch Centre having territorial jurisdiction as determined by the Central Government
2. No Regional Load Despatch Centre shall engage in the business of generation of electricity or trading in electricity
3. The Regional Load Despatch Centre may give such directions and exercise such supervision and control as may be required for ensuring stability of grid operations and for achieving the maximum economy and efficiency in the operation of the power system in the region under its control
4. Every licensee, generating company, generating station, substation and any other person connected with the operation of the power system shall comply with the direction issued by the Regional Load Dispatch Centre
[section 28, 29]
2. No Regional Load Despatch Centre shall engage in the business of generation of electricity or trading in electricity
3. The Regional Load Despatch Centre may give such directions and exercise such supervision and control as may be required for ensuring stability of grid operations and for achieving the maximum economy and efficiency in the operation of the power system in the region under its control
4. Every licensee, generating company, generating station, substation and any other person connected with the operation of the power system shall comply with the direction issued by the Regional Load Dispatch Centre
[section 28, 29]
Intra-state transmission within State
The State Commission shall facilitate and promote transmission, wheeling and inter-connection arrangements within its territorial jurisdiction for the transmission and supply of electricity by economical and efficient utilisation of the electricity
[section 30]
[section 30]
Constitution & Functions of State Load Dispatch Centres and Compliance of Direction
1. The State Load Despatch Centre shall be operated by a Government company or any authority and until a Government company or any authority or corporation is notified by the State Government, the State Transmission Utility shall operate the State Load Despatch Centre
2. No State Load Despatch Centre shall engage in the business of trading in electricity
3. Be responsible for optimum scheduling and despatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State
4. Every licensee, generating company, generating station, substation and any other person connected with the operation of the power system shall comply with the direction issued by the State Load Depatch Centre
5. The State Load Despatch Centre shall comply with the directions of the Regional Load Despatch Centre
[section 31, 32, 33]
2. No State Load Despatch Centre shall engage in the business of trading in electricity
3. Be responsible for optimum scheduling and despatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State
4. Every licensee, generating company, generating station, substation and any other person connected with the operation of the power system shall comply with the direction issued by the State Load Depatch Centre
5. The State Load Despatch Centre shall comply with the directions of the Regional Load Despatch Centre
[section 31, 32, 33]
Central Transmission Utility and functions
1. The Central Government may notify any Government company as the Central Transmission Utility
2. The functions of the Central Transmission Utility shall be-
a) to undertake transmission of electricity through inter-State transmission system
b) to ensure development of an efficient, co-ordinated and economical system of inter-State transmission lines for smooth flow of electricity from generating stations to the load centres
c) to provide non-discriminatory open access to its transmission system
[section 38]
2. The functions of the Central Transmission Utility shall be-
a) to undertake transmission of electricity through inter-State transmission system
b) to ensure development of an efficient, co-ordinated and economical system of inter-State transmission lines for smooth flow of electricity from generating stations to the load centres
c) to provide non-discriminatory open access to its transmission system
[section 38]
State Transmission Utility and functions
1. The State Government may notify the Board or a Government company as the State Transmission Utility
2. The functions of the State Transmission Utility shall be-
a) to undertake transmission of electricity through intra-State transmission system
b) to ensure development of an efficient, co-ordinated and economical system of intra-State transmission lines for smooth flow of electricity from a generating station to the load centres
c) to provid non-discriminatory open access to its transmission system
[section 39]
2. The functions of the State Transmission Utility shall be-
a) to undertake transmission of electricity through intra-State transmission system
b) to ensure development of an efficient, co-ordinated and economical system of intra-State transmission lines for smooth flow of electricity from a generating station to the load centres
c) to provid non-discriminatory open access to its transmission system
[section 39]
Transmission licensees
1. It shall be the duty of a transmission licensee-
a) to build, maintain and operate an efficient, co-ordinated and economical inter-State transmission system or intra-State transmission system
b) to comply with the directions of the Regional Load Despatch Centre and the State Load Despatch Centre
c) to provide non-discriminatory open access to its transmission system
2. Any surcharge levied shall be utilised for the purpose of meeting the requirement of current level cross-subsidy
3. Such surcharge and cross subsidies shall be progressively reduced and eliminated in the manner as may be specified by the Appropriate Commission
[section 40]
a) to build, maintain and operate an efficient, co-ordinated and economical inter-State transmission system or intra-State transmission system
b) to comply with the directions of the Regional Load Despatch Centre and the State Load Despatch Centre
c) to provide non-discriminatory open access to its transmission system
2. Any surcharge levied shall be utilised for the purpose of meeting the requirement of current level cross-subsidy
3. Such surcharge and cross subsidies shall be progressively reduced and eliminated in the manner as may be specified by the Appropriate Commission
[section 40]
Duties of Transmission Licensees
It shall be the duty of a transmission licensee:
(a) to build, maintain and operate an efficient, co-ordinated and economical inter-State transmission system or intra-State transmission economical inter-State transmission system or intra-State transmission system, as the case may be;
(b) to comply with the directions of the Regional Load Despatch Centre and the State Load Despatch Centre as the may be;.
(c) to provide non-discriminatory open access to its transmission system for use by-
(i) any licensee or generating company on payment of the transmission charges; or
(ii) any consumer as and when such open access is provided by the State Commission.
(Section 40)
(a) to build, maintain and operate an efficient, co-ordinated and economical inter-State transmission system or intra-State transmission economical inter-State transmission system or intra-State transmission system, as the case may be;
(b) to comply with the directions of the Regional Load Despatch Centre and the State Load Despatch Centre as the may be;.
(c) to provide non-discriminatory open access to its transmission system for use by-
(i) any licensee or generating company on payment of the transmission charges; or
(ii) any consumer as and when such open access is provided by the State Commission.
(Section 40)
Tariff Regulations
The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:-
(a) the principles and methodologies specified by the Central
Commission for determination of the tariff applicable to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles;
(Section 61)
(a) the principles and methodologies specified by the Central
Commission for determination of the tariff applicable to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles;
(Section 61)
Functions of Central Electricity Authority
1. The CEA shall perform such functions and duties as the Central Government may prescribe or direct, and in particular to-
a) advise the Central Government on the matters relating to the national electricity policy, formulate short-term and perspective plans for development of the electricity system and co- ordinate the activities of the planning agencies for the optimal utilisation of resources
b) specify the technical standards for construction of electrical plants, electric lines and connectivity to the grid
c) specify the safety requirements for construction, operation and maintenance of electrical plants and electric lines
d) specify the Grid Standards for operation and maintenance of transmission lines
e) specify the conditions for installation of meters for transmission and supply of electricity
[section 73]
a) advise the Central Government on the matters relating to the national electricity policy, formulate short-term and perspective plans for development of the electricity system and co- ordinate the activities of the planning agencies for the optimal utilisation of resources
b) specify the technical standards for construction of electrical plants, electric lines and connectivity to the grid
c) specify the safety requirements for construction, operation and maintenance of electrical plants and electric lines
d) specify the Grid Standards for operation and maintenance of transmission lines
e) specify the conditions for installation of meters for transmission and supply of electricity
[section 73]
Central Electricity Regulatory Commission
1. The Central Commission shall discharge the following functions, namely-
a) to regulate the inter-State transmission of electricity
b) to determine tariff for inter-State transmission of electricity
c) to issue licenses to persons to function as transmission licensee with respect to their inter-State operations
d) to specify Grid Code having regard to Grid Standards
[section 79]
a) to regulate the inter-State transmission of electricity
b) to determine tariff for inter-State transmission of electricity
c) to issue licenses to persons to function as transmission licensee with respect to their inter-State operations
d) to specify Grid Code having regard to Grid Standards
[section 79]
Resolution By
Ministry of Power
Date of Notification
02 June 2003
Electricity Act- Amendment 1
Licensing
No amendment relating transmission
Amendments, if any
No amendment relating transmission
Resolution By
Ministry of Power
Date of Notification
30 Dec 2003
Electricity Act- Amendment 2
Transmission licensees
The provision "…surcharge levied shall be utilised…current level of cross-subsidy" removed
[clause 6]
[clause 6]
Resolution By
Ministry of Power
Date of Notification
29 May 2007