Guide To The Electricity Laws

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Power is today a basic human need. It is the critical infrastructure on which modern economic activity is fully dependent. Only 55% households in India have access to electricity. Most of those who have access do not get uninterrupted reliable supply. The Industry In India has among the highest tariffs In the world and is not assured of the quality of supply. In this era of globalisation, it is essential that electricity of good quality is provided at reasonable rates for economic activity so that competitiveness increases. Being internationally competitive is now essential for achieving the vision of 8% GDP growth per annum, employment generation and poverty alleviation. It is In this context that the Electricity Act, 2003 seeks to bring about a qualitative transformation of the electricity sector through a new paradigm. The Act seeks to create liberal framework of development for the power sector by distancing Government from regulation. It replaces the three existing legislations, namely, Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. The objectives of the Act are \"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.\"\"\"The Act strikes a balance which takes into account the complex ground realities of the power sector in India with its ineluctable problems, The salient features of the Act are: (i) The Central Government to prepare a National Electricity Policy in consultation withState Governments. (Section 3) (ii) Thrust to complete the rural electrification and provide for management of rural distribution by Panchayats, Cooperative Societies, non-Government organisations, franchisees etc. (Sections 4, 5 & 6) (iii) Provision for licence free generation and distribution in the rural areas. (Section 14) (iv) Generation, being de licensed and captive generation being freely permitted, Hydro projects would, however, need clearance from the Central Electricity Authority. (Sections 7, 8 & 9) (v) Transmission Utility at the Central as well as State level, to be a Government company-with responsibility for planned and coordinated development of transmission network. (Sections 38 & 39)\"\"(vi) Provision for private licensees in transmission and entry in distribution through an independent network, (Section 14) (vii) Open access in transmission from the outset, (Sections 38-40) (viii) Open access in distribution to be introduced in phases with surcharge for current level of cross subsidy to be gradually phased out along with cross subsidies and obligation to supply. SERCs to frame regulations within one year regarding phasing of open access. (Section 42) (ix) Distribution licensees would be free to undertake generation and generating companies would be free to take up distribution businesses. (Sections 7, 12) (x) The State Electricity Regulatory Commission is a mandatory requirement. (Section 82) (xi) Provision for payment of subsidy through budget. (Section 65)\"\"(xii) Trading, a distinct activity is being recognised with the safeguard of the Regulatory Commissions being authorised to fix ceilings on trading margins if necessary. (Sections 12, 79 & 86) (xiii) Provision for reorganisation or continuance of SEBs. (Secs. 131 & 172) (xiv) Metering of all electricity supplied made mandatory. (Section 55) (xv) An Appellate Tribunal to hear appeals against the decision of the CERC and SERCs. (Section 111) (xvi) Provisions relating to theft of electricity made more stringent, (Section 135-150) (xvii) Provisions safeguarding consumer interests. (Sections 57-59, 166) Ombudsman scheme (Section 42) for consumers grievance redressal.\"SOME OPINIONS ON THE PREVIOUS EDITIONS.