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ELECTRICITY ACT, 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. BE it enacted by Parliament in the Fifty-fourth Year of the Republic of India as follows:-
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called the Electricity Act, 2003.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification,
Appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
SECTION 02: DEFINITIONS
In this Act, unless the context otherwise requires,-
(1) "Appellate Tribunal" means the Appellate Tribunal for Electricity established under section
110;
(2) "appointed date" means such date as the Central Government may, by notification, appoint;
(3) "area of supply" means the area within which a distribution licensee is authorised by his licence to supply electricity;
(4) "Appropriate Commission" means the Central Regulatory Commission referred to in subsection
(1) of section 76 or the State Regulatory Commission referred to in section 82 or the
Joint Commission referred to in section 83, as the case may be;
(5) "Appropriate Government" means,-
(a) the Central Government,-
(i) in respect of a generating company wholly or partly owned by it;
(ii) 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;
(iii) in respect of the National Load Despatch Centre and Regional Load Despatch Centre;
(iv) 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;
(6) "Authority" means the Central Electricity Authority referred to in sub-section (1) of section 70;
(7) "Board" means a State Electricity Board, constituted before the commencement of this Act, under sub-section
(1) of section 5 of the Electricity (Supply) Act, 1948 (54 of 1948);
(8) "Captive generating plant" means 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 co-operative society or association;
(9) "Central Commission" means the Central Electricity Regulatory Commission referred to in sub-section (1) of section 76;
(10) "Central Transmission Utility" means any Government company which the Central Government may notify under sub-section (1) of section 38;
(11) "Chairperson" means the Chairperson of the Authority or Appropriate Commission or the Appellate Tribunal, as the case may be;
(12) "Cogeneration" means a process which simultaneously produces two or more forms of useful energy (including electricity);
(13) "company" means a company formed and registered under the Companies Act, 1956 (1 of 1956) and includes any body corporate under a Central, State or Provincial Act;
(14) "conservation" means any reduction in consumption of electricity as a result of increase in the efficiency in supply and use of electricity;
(15) "consumer" means 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;
(16) "dedicated transmission lines" means 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;
(17) "distribution licensee" means a licensee authorised to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply;
(18) "distributing main" means the portion of any main with which a service line is, or is intended to be, immediately connected;
(19) "distribution system" means 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;
(20) "electric line" means 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;
(21) "Electrical Inspector" means a person appointed as such by the Appropriate Government under sub-section
(1) of section 157 and also includes Chief Electrical Inspector;
(22) "electrical plant" means 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; or
(b) a meter used for ascertaining the quantity of electricity supplied to any premises; or
(c) an electrical equipment, apparatus or appliance under the control of a consumer;
(23) "electricity" means electrical energy-
(a) generated, transmitted, supplied or traded for any purpose; or
(b) used for any purpose except the transmission of a message;
(24) "Electricity Supply Code" means the Electricity Supply Code specified under section 50;
(25) "electricity system" means a system under the control of a generating company or licensee, as the case may be, having one or more-
(a) generating stations; or
(b) transmission lines; or
(c) electric lines and sub-stations, and when used in the context of a State or the Union, the entire electricity system within the territories thereof;
(26) "electricity trader" means a person who has been granted a licence to undertake trading in electricity under section 12;
(27) "franchisee" means a person authorised by a distribution licensee to distribute electricity on its behalf in a particular area within his area of supply;
(28) "generating company" means 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;
(29) "generate" means to produce electricity from a generating station for the purpose of giving supply to any premises or enabling a supply to be so given;
(30) "generating station" or "station" means any station for generating electricity, including any building and plant with step-up transformer, switch-gear, 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;
(31) "Government company" shall have the meaning assigned to it in section 617 of the Companies Act, 1956 (1of 1956);
(32) "grid" means the high voltage backbone system of inter-connected transmission lines, sub-station and generating plants;
(33) "Grid Code" means the Grid Code specified by the Central Commission under clause (h) of sub-section (1) of section 79;
(34) "Grid Standards" means the Grid Standards specified under clause (d) of section 73 by the Authority;
(35) "high voltage line" means an electric line or cable of a nominal voltage as may be specified by the Authority from time to time;
(36) "inter-State transmission system" includes-
(i) any system for the conveyance of electricity by means of main transmission line from the territory of one State to another State;
(ii) 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;
(iii) the transmission of electricity within the territory of a State on a system built, owned, operated, maintained or controlled by a Central Transmission Utility;
(37) "intra-State transmission system" means any system for transmission of electricity other than an inter-State transmission system;
(38) "licence" means a licence granted under section 14;
(39) "licensee" means a person who has been granted a licence under section 14;
(40) "line" means 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;
(41) "local authority" means 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;
(42) "main" means any electric supply-line through which electricity is, or is intended to be, supplied;
(43) "Member" means 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;
(44) "National Electricity Plan" means the National Electricity Plan notified under sub-section (4) of section 3;
(45) "National Load Despatch Centre" means the Centre established under sub-section (1) of section 26;
(46) "notification" means notification published in the Official Gazette and the expression "notify" shall be construed accordingly;
(47) "open access" means 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;
(48) "overhead line" means an electric line which is placed above the ground and in the open air but does not include live rails of a traction system;
(49) "person" shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person;
(50) "power system" means 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 despatch activities;
(f) mains or distribution mains;
(g) electric supply-lines;
(h) overhead lines;
(i) service lines;
(j) works;
(51) "premises" includes any land, building or structure;
(52) "prescribed" means prescribed by rules made by the Appropriate Government under this Act;
(53) "public lamp" means an electric lamp used for the lighting of any street;
(54) "real time operation" means action to be taken at given time at which information about the electricity system is made available to the concerned Load Despatch Centre;
(55) "Regional Power Committee" means 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;
(56) "Regional Load Despatch Centre" means the Centre established under sub-section (1) of section 27;
(57) "regulations" means regulations made under this Act;
(58) "repealed laws" means the Indian Electricity Act, 1910 (9 of 1910), the Electricity (Supply) Act, 1948 (54 of
1948) and the Electricity Regulatory Commissions Act, 1998 (14 of 1998) repealed by section 180;
(59) "rules" means rules made under this Act;
(60) "Schedule" means the Schedule to this Act;
(61) "service-line" means 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;
(62) "specified" means specified by regulations made by the Appropriate Commission or the Authority, as the case may be, under this Act;
(63) "stand alone system" means the electricity system set-up to generate power and distribute electricity in a
specified area without connection to the grid;
(64) "State Commission" means 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;
(65) "State Grid Code" means the State Grid Code specified under clause (h) of sub-section (1) of section 86;
(66) "State Load Despatch Centre" means the centre established under sub-section (1) of section 31;
(67) "State Transmission Utility" means the Board or the Government Company specified as such by the State Government under sub- section (1) of section 39;
(68) "street" 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 also the roadway and footway over any public bridge or causeway;
(69) "sub-station" means 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 appurtenant equipment and any buildings used for that purpose and the site thereof;
(70) "supply", in relation to electricity, means the sale of electricity to a licensee or consumer;
(71) "trading" means purchase of electricity for resale thereof and the expression "trade" shall be construed accordingly;
(72) "transmission lines" means 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 sub-station, 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.
(73) "transmission licensee" means a licensee authorised to establish or operate transmission lines;
(74) "transmit" means conveyance of electricity by means of transmission lines and the expression "transmission" shall be construed accordingly;
(75) "utility" means 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;
(76) "wheeling" means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the ease may be, are used by another person for the conveyance of electricity on payment of charges to be determined under section 62;
(77) "works" 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.
SECTION 03: NATIONAL ELECTRICITY POLICY AND PLAN
(1) The Central Government shall, from time to time, prepare the National Electricity Policy and tariff policy, in consultation with the State Governments and the Authority for development of the power system based on optimal utilisation of resources such as coal, natural gas, nuclear substances or materials, hydro and renewable sources of energy.
(2) The Central Government shall publish the National Electricity Policy and tariff policy from time to time.
(3) The Central Government may, from time to time in consultation with the State Governments, and the Authority review or revise, the National Electricity Policy and tariff policy referred to in sub-section (1).
(4) The Authority shall prepare a National Electricity Plan in accordance with the National Electricity Policy and notify such plan once in five years: Provided that the Authority while preparing the National Electricity Plan shall publish the draft National Electricity Plan and invite suggestions and objections thereon from licensees, generating companies and the public within such time as may be prescribed: Provided further that the Authority shall-
(a) notify the plan after obtaining the approval of the Central Government;
(b) revise the plan incorporating therein the directions, if any, given by the Central Government while granting approval under clause (a).
(5) The Authority may review or revise the National Electricity Plan in accordance with the National Electricity Policy.
SECTION 04: NATIONAL POLICY ON STAND ALONE SYSTEMS FOR RURAL AREAS AND NON- CONVENTIONAL ENERGY SYSTEMS
The Central Government shall, after consultation with the State Governments, prepare and notify a national policy, permitting stand alone systems (including those based on renewable sources of energy and other non-conventional sources of energy) for rural areas.
SECTION 05: NATIONAL POLICY ON ELECTRIFICATION AND LOCAL DISTRIBUTION IN RURAL AREAS
The Central Government shall also formulate a national policy, in consultation with the State Governments and the State Commissions, for rural electrification and for bulk purchase of power and management of local distribution in rural areas through Panchayat Institutions, users' associations, co-operative societies, non-governmental organisations or franchisees.
SECTION 06: OBLIGATIONS TO SUPPLY ELECTRICITY TO RURAL AREAS
The Appropriate Government shall endeavour to supply electricity to all areas including villages and hamlets.
SECTION 07: GENERATING COMPANY AND REQUIREMENT FOR SETTING UP OF GENERATING STATION
Any generating company may establish, operate and maintain a generating station without obtaining a licence under this Act if it complies with the technical standards relating to connectivity with the grid referred to in clause (b) of section 73.
SECTION 08: HYDRO-ELECTRIC GENERATION
(1) Notwithstanding anything contained in section 7, any generating company intending to setup a hydro-generating station shall prepare and submit to the Authority for its concurrence, a scheme estimated to involve a capital expenditure exceeding such sum, as may be fixed by the Central Government, from time to time, by notification.
(2) The Authority shall, before concurring in any scheme submitted to it under sub-section (1) have particular regard to, whether or not in its opinion,-
(a) the proposed river-works will prejudice the prospects for the best ultimate development of the river or its tributaries for power generation, consistent with the requirements of drinking water, irrigation, navigation, flood-control, or other public purposes, and for this purpose the Authority shall satisfy itself, after consultation with the State Government, the Central Government, or such other agencies as it may deem appropriate, that an adequate study has been made of the optimum location of dams and other river works;
(b) the proposed scheme meets the norms regarding dam design and safety.
(3) Where a multi-purpose scheme for the development of any river in any region is in operation, the State Government and the generating company shall co-ordinate their activities with the activities of the persons responsible for such scheme in so far as they are inter-related.
SECTION 09: CAPTIVE GENERATION
(1) Notwithstanding anything contained m this Act, a person may construct, maintain or operate a captive generating plant and dedicated transmission lines: Provided that the supply of electricity from the captive generating plant through the grid shall be regulated in the same manner as the generating station of a generating company.
(2) Every person, who has constructed a captive generating plant and maintains and operates such plant, shall have the right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use:
Provided that such open access shall be subject to availability of adequate transmission facility and such availability of transmission facility shall be determined by the Central Transmission Utility or the State Transmission Utility, as the case may be:
Provided further that any dispute regarding the availability of transmission facility shall be adjudicated upon by the Appropriate Commission.
SECTION 10: DUTIES OF GENERATING COMPANIES
(1) Subject to the provisions of this Act, the duties of a generating company shall be to establish, operate and maintain generating stations, tie-lines, sub-stations' and dedicated transmission lines connected therewith in accordance with the provisions of this Act or the rules or regulations made there under.
(2) A generating company may supply electricity to any licensee in accordance with this Act and the rules and regulations made there under and may, subject to the regulations made under sub-section (2) of section 42, supply electricity to any consumer.
(3) Every generating company shall-
(a) submit technical details regarding its generating stations to the Appropriate Commission and the Authority;
(b) co-ordinate with the Central Transmission Utility or the State Transmission Utility, as the case may be, for transmission of the electricity generated by it.
SECTION 11: DIRECTIONS TO GENERATING COMPANIES
(1) The Appropriate Government may specify that a generating company shall, in extraordinary circumstances operate and maintain any generating station in accordance with the directions of that Government.
Explanation.-For the purposes of this section, the expression "extraordinary circumstances" means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest.
(2) The Appropriate Commission may offset the adverse financial impact of the directions referred to in sub-section (1) on any generating company in such manner as it considers appropriate.
SECTION 12: AUTHORISED PERSONS TO TRANSMIT SUPPLY, ETC., ELECTRICITY
-No person shall-
(a) transmit electricity; or
(b) distribute electricity; or
(c) undertake trading in electricity, unless he is authorised to do so by a licence issued under section 14, or is exempt under section 13.
SECTION 13: POWER TO EXEMPT
The Appropriate Commission may, on the recommendations, of the Appropriate Government, in accordance with the national policy formulated under section 5 and in the public interest, direct, by notification that subject to such conditions and restrictions, if any, and for such period or periods, as may be specified in the notification, the provisions of section 12 shall not apply to any local authority, Panchayat Institution, users' association, co-operative societies, non-governmental organisations, or franchisees.
SECTION 14: GRANT OF LICENCE
The Appropriate Commission may, on an application made to it under section 15, 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:
Provided that any person engaged in the business of transmission or supply of electricity under the provisions of the repealed laws or any Act specified in the Schedule on or before the appointed date shall be deemed to be a licensee under this Act for such period as may be stipulated in the licence, clearance or approval granted to him under the repealed laws or such Act specified in the Schedule, and the provisions of the repealed laws or such Act specified in the Schedule in respect of such licence shall apply for a period of one year from the date of commencement of this Act or such earlier period as may be specified, at the request of the licensee, by the Appropriate Commission and thereafter the provisions of this Act shall apply to such business:
Provided further that the Central Transmission Utility or the State Transmission Utility shall be deemed to be a transmission licensee under this Act: Provided also that in case an appropriate Government transmits electricity or distributes electricity or undertakes trading in 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:
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, in so far as they are not inconsistent with the provisions of this Act, shall continue to apply to that Corporation.
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