Section 14 - Grant of licence
Draft Amendments to Electricity Act, 2003 (September 2018) Page 18
(b) to distribute electricity as a distribution licensee; or
(c) to undertake trading in electricity as an electricity trader, or
(d) to supply electricity as a supply licensee from and after the date of
implementation of the Transfer Scheme in any area as may be specified in the
licence;
Provided that the distribution licensee shall be deemed to have the authorisation to supply
electricity as a supply licensee till the transfer scheme is implemented in the area of the
distribution licensee;
Provided also that the Developer of a Special Economic Zone notified under sub-section
(1) of Section 4 of the Special Economic Zones Act, 2005, shall be deemed to be a
licensee for the purpose of clause (b) and clause (d) above with effect from the date of notification of such Special Economic Zone;
Provided also that Railways as defined under the Indian Railways Act 1989 and Metro Rail Corporation established under the Metro Railways (Operation and Maintenance) Act,2002, Mono rail and such other transport or other entities as may be notified by the Central Government, from time to time, shall be deemed to be a licensee under this Act, and shall not be required to obtain a licence under this Act:
Provided also that the Damodar Valley Corporation, established under sub-section (1) of
section 3 of the Damodar Valley Corporation Act, 1948, shall be deemed to be a licensee
under this Act but shall not be required to obtain a licence under this Act and the
provisions of the Damodar Valley Corporation Act, 1948, insofar as they are not
inconsistent with the provisions of this Act, shall continue to apply to that Corporation:
Provided also that the Appropriate Commission may grant a licence to two or more
persons for distribution undertaking supply of electricity through own distribution system the same area of supply, subject to the conditions that the applicant for grant of
supply licence within the same area shall, without prejudice to the other conditions or
requirements under this Act, comply with the additional requirements (relating to the
capital adequacy, creditworthiness or code of conduct) as may be prescribed by the
Central Government, and no such applicant, who complies with all the requirements for
grant of licence, shall be refused grant of licence on the ground that there already exists a
licensee in the same area for the same purpose:
Draft Amendments to Electricity Act, 2003 (September 2018) Page 20
Provided also that the State Government in consultation with the Appropriate Commission and Central Government may, in public interest, permit more than one distribution licensee to operate in any area, if it is considered necessary.
Provided also that where two or more distribution licensees within the same area of
distribution exist on the date of the commencement of the Electricity (Amendment) Act,
2018 they shall continue their operation till such period as specified in their licence.
Provided also that in a case where a distribution licensee proposes to undertake
distribution of electricity for a specified area within his area of supply through another
person, that person shall not be required to obtain any separate licence from the
concerned State Commission and such distribution licensee shall be responsible for
distribution of electricity in his area of supply:
Provided also that where a person intends to generate, distribute and supply electricity in a
rural area to be notified by the State Government, such person shall not require any
licence for such generation, distribution and supply of electricity, but he shall comply with
the measures which may be specified by the Authority under section 53:
Provided that where a person intends to generate and supply electricity from Renewable
Energy Sources, such person shall not require any licence for such generation and supply
of electricity, but he shall comply with the measures which may be specified by the
Authority under section 53 and 73:
Provided also that a distribution supply licensee shall not require a licence to undertake
trading in electricity.
Provided also that a distribution licensee, after implementation of the Transfer Scheme
shall not engage in trading or supply of electricity, unless otherwise specifically approved by the Central Government;
Provided also that in a case where a distribution licensee or a supply licensee proposes to
undertake distribution or supply of electricity for a specified area within his area of
distribution or supply through a franchisee, the franchisee shall not be required to obtain
any separate licence from the Appropriate Commission however agreements including
terms and condition for appointment of franchisee shall be approved by the Appropriate
Commission and distribution licensee or a supply licensee shall be held responsible for
non-compliance of any provision of the law or Rules or Regulations by the franchisee;
Section 25 (A) - National Power Committee
(1) The Central Government may establish a Committee at the national level, to be known
as National Power Committee for facilitating the integrated operation of the power system
at national level.
(2) The constitution and functions of the National Power Committee shall be such, as may
be prescribed by the Central Government, by resolution.
(3) The National Power Committee shall have a secretariat which will be headed by the
Member Secretary of the Committee. The Member Secretary as well as other staff of the
Secretariat shall be provided by the Central Electricity Authority.
Section 25 (B) - Regional Power Committee
(1) The Central Government may establish a Committee to be known as Regional Power
Committee for a specified region, for facilitating the integrated operation of the power
system in that region.
(2) The constitution and functions of the Regional Power Committee shall be such, as may
be prescribed by the Central Government, by resolution.
(3) The Regional Power Committee shall have a secretariat which will be headed by the
Member Secretary of the Committee. The Member Secretary as well as other staff of the
Secretariat shall be provided by the Central Electricity Authority.
Section 25 (C) - State Power Committee
(1) The State Government may establish a Committee to be known as State Power
Committee for facilitating the integrated operation of the power system in the state.
(2) The constitution and functions of the State Power Committee shall be such, as may be
prescribed by the State Government, by resolution.
(4) The Appropriate Commission shall carry out a review every two years and
assess whether (a) the Distribution/Supply Company has tied up adequate
sources of supply through long/medium term PPAs to meet the annual average
demand of the area it is required to serve, (b) that it is maintaining the
distribution system in good order in order to ensure reliable 24 X 7 supply (c)
that the complaints of the consumers are promptly addressed and in case of
persistent shortfall in the above, the Commission may:
Provided that, the State Government may transfer, and vest any property, interest in
property, rights and liabilities connected with, and personnel involved in supply of
electricity of such Distribution Utility, to a company or companies to be incorporated or registered under the Companies Act, 2013 to function as a supply licensee, through a transfer scheme to be effected in the manner specified under Part XIII and such
company or companies shall be deemed to be supply licensees under this Act.
Draft Amendments to Electricity Act, 2003 (September 2018) Page 39
(5) Upon the vesting of the supply of electricity in another company in terms of the
proviso to Sub-section (1), the duty of the Distribution licensee shall be restricted to
distribution in the manner provided in Sub-section (1) to enable supply of electricity
by the supply licensee(s) and the distribution licensee shall cease to undertake
supply of electricity.
(6) The State Commission shall facilitate open access subject to such conditions, as
may be specified by it:
Provided that such open access shall be allowed on payment of wheeling charges
and a surcharge thereon as may be determined by the State Commission; provided
that the surcharge shall not be more than twenty percent of the wheeling charges.
Provided also that such surcharge shall be progressively reduced and eliminated in
two years in the manner as may be specified by the State Commission.
Provided
(a) Consumption of electricity by the consumer shall be metered and charges shall be
paid in accordance with the tariff determined by the Appropriate Commission;
(b) Where the State Government or any other agency proposes to provide any subsidy to
any category of consumer, it shall be through Direct Benefit Transfer.
(1) All sale/purchase of power shall be through Long Term/Medium Term/Short Term
Power Purchase Agreements, the format for which shall be laid down by the Authority, with approval of Central Government.
(2) No PPA shall be cancelled except with the approval of the Appropriate Commission.
(3) Violation of PPA will lead to penalties which may be as determined by the
Appropriate Commission which may be fines which may extend to Rupees One crore per
day, and, in case of licensees may also extend to suspension and cancellation of licence.
(4) With effect from the commencement of the Electricity (Amendment ) Act, 2018, all
consumers having a connected load of 1 Mega Watt and above with the power system,
may procure at their option electricity through open access under contractual agreement
from any generating company, trading licensee, or from any other source.
(5) Notwithstanding anything contained in clause (d) of sub-section (1) of section 62, the
consumers mentioned in sub-section (4), may enter into an agreement with any person for
supply or purchase of electricity on such terms and conditions (including tariff) as may be
agreed upon by them.
Section 50
(d) the recovery of the cost of electricity, service cost, wheeling charges and any
other cost to ensure the reasonable return on the capital employed while at the
same time ensuring the consumer’s interest;
(e) consider capital cost as well as other incidental costs and where such costs are
found excessive and unreasonable as per prevailing industry norms, shall scale it
down to industry norms.
(f) ensure the burden of inefficiencies of the Distribution/Supply Companies shall
not be passed on to the consumers;
(g) the cross subsidization of tariff of the consumers within the distribution area
shall not exceed 20 percent and shall be progressively reduced and eliminated
within three years. The Appropriate Commission shall determine the trajectory for
reduction of cross subsidization of tariff, among the class of consumers and shall
ensure that the reduction in cross subsidy shall be not less than six percent in one
year.
(h) safeguarding of consumers' interest and at the same time, recovery of the cost
of electricity in a reasonable manner without any revenue deficit in the revenue
requirements approved by the Appropriate Commission for the period for the tariff
determined under section 62:
(i) the principles rewarding efficiency in performance;
(j) multi year tariff principles;
(k) time of the day tariff principles for generation, transmission and supply of
electricity;
(g) that the tariff progressively reflects the cost of supply of electricity and also
reduces cross-subsidies in the manner specified by the Appropriate Commission;
(h) the promotion of co-generation and generation of electricity from renewable
sources of energy;
(i) the National Electricity Policy and tariff policy:
Provided that the terms and conditions for determination of tariff under the
Electricity (Supply) Act, 1948, the Electricity Regulatory Commission Act, 1998 and
the enactments specified in the Schedule as they stood immediately before the
appointed date, shall continue to apply for a period of one year or until the terms and
conditions for tariff are specified under this section, whichever is earlier.
Section 62
1. Notwithstanding anything contained in the Act if the State Government or Central
Government, as the case may be, desires the grant of any subsidy to any consumer or
class of consumers in the tariff determined by the State Commission under section 62
and as per the final tariff order issued under section 64, such subsidy shall be directly
transferred to the beneficiary by direct benefit transfer into the bank account of the
beneficiary.
2. If the Central Government requires the grant of any subsidy to any consumer or class of consumers through a central government scheme, it shall pay such subsidy directly
to such consumer through direct benefit transfer into the bank account of the
beneficiary.