The Electricity Act, 2003

Jharkhand · state statute

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THE ELECTRICITY ACT, 2003
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ARRANGEMENT OF SECTIONS
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PART I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.

PART II
NATIONAL ELECTRICITY POLICY AND PLAN
3. National Electricity Policy and Plan.
4. National policy on stand alone systems for rural areas and non-conventional energy systems.
5. National policy on electrification and local distribution in rural areas.
6. Joint responsibility of State Government and Central Government in rural electrification.

PART III
GENERATION OF ELECTRICITY
7. Generating company and requirement for setting up of generating station.
8. Hydro-electric generation.
9. Captive generation.
10. Duties of generating companies.
11. Directions to generating companies.

PART IV
LICENSING
12. Authorised persons to transmit, supply, etc., electricity.
13. Power to exempt.
14. Grant of licence.
15. Procedure for grant of licence.
16. Conditions of licence.
17. Licensee not to do certain things.
18. Amendment of licence.
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SECTIONS
19. Revocation of licence.
20. Sale of utilities of licensees.
21. Vesting of utility in purchaser.
22. Provisions where no purchase takes place.
23. Directions to licensees.
24. Suspension of distribution licence and sale of utility.

PART V
TRANSMISSION OF ELECTRICITY
Inter-State transmission
25. Inter-State, regional and inter-regional transmission.
26. National Load Despatch Centre.
27. Constitution of Regional Load Despatch Centre.
28. Functions of Regional Load Despatch Centre.
29. Compliance of directions.
Intra-State transmission
30. Transmission within a State.
31. Constitution of State Load Despatch Centers.
32. Functions of State Load Despatch Centers.
33. Compliance of directions.
Other provisions relating to transmission
34. Grid Standards.
35. Intervening transmission facilities.
36. Charges for intervening transmission facilities.
37. Directions by Appropriate Government.
38. Central Transmission Utility and functions.
39. State Transmission Utility and functions.
40. Duties of transmission licensees.
41. Other business of transmission licensee.
PART VI
DISTRIBUTION OF ELECTRICITY
Provisions with respect to distribution licensees
42. Duties of distribution licensee and open access.
43. Duty to supply on request.
44. Exceptions from duty to supply electricity.
45. Power to recover charges.

SECTIONS
46. Power to recover expenditure.
47. Power to require security.
48. Additional terms of supply.
49. Agreements with respect to supply or purchase of electricity.
50. The Electricity supply code.
51. Other businesses of distribution licensees.
Provisions with respect to electricity traders
52. Provisions with respect to electricity trader.
Provisions with respect to supply generally
53. Provision relating to safety and electricity supply.
54. Control of transmission and use of electricity.
55. Use, etc., of meters.
56. Disconnection of supply in default of payment.
Consumer protection: Standards of performance
57. Standards of performance of licensee.
58. Different standards of performance by licensee.
59. Information with respect to levels of performance.
60. Market domination.

PART VII
TARIFF
61. Tariff regulations.
62. Determination of tariff.
63. Determination of tariff by bidding process.
64. Procedure for tariff order.
65. Provision of subsidy by State Government.
66. Development of market.
PART VIII
WORKS
Works of licensees
67. Provision as to opening up of streets, railways, etc.
Provisions relating to overhead lines
68. Overhead lines.
69. Notice to telegraph authority.
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PART IX
CENTRAL ELECTRICITY AUTHORITY
Constitution and functions of Authority
SECTIONS
70. Constitution, etc., of Central Electricity Authority.
71. Members not to have certain interest.
72. Officers and staff of Authority.
73. Functions and duties of Authority.
Certain powers and directions
74. Power to require statistics and returns.
75. Directions by Central Government to Authority.
PART X
REGULATORY COMMISSIONS
Constitution, powers and functions of Central Commission
76. Constitution of Central Commission.
77. Qualifications for appointment of Members of Central Commission.
78. Constitution of Selection Committee to recommend Members.
79. Functions of Central Commission.
80. Central Advisory Committee.
81. Objects of Central Advisory Committee.
Constitution, powers and functions of State Commissions
82. Constitution of State Commission.
83. Joint Commission.
84. Qualifications for appointment of Chairperson and Members of State Commission.
85. Constitution of Selection Committee to select Members of State Commission.
86. Functions of State Commission.
87. State Advisory Committee.
88. Objects of State Advisory Committee.
Appropriate Commission–Other provisions
89. Term of office and conditions of service of Members.
90. Removal of Member.
Proceedings and powers of Appropriate Commission
91. Secretary, officers and other employees of Appropriate Commission.
92. Proceedings of Appropriate Commission.
93. Vacancies, etc., not to invalidate proceedings.
94. Powers of Appropriate Commission.
95. Proceedings before Commission.
96. Powers of entry and seizure.
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SECTIONS
97. Delegation.
Grants, Fund and Accounts, Audit and Report
98. Grants and loans by Central Government.
99. Establishment of Fund by Central Government.
100. Accounts and audit of Central Commission.
101. Annual report of Central Commission.
102. Grants and Loans by State Government.
103. Establishment of Fund by State Government.
104. Accounts and audit of State Commission.
105. Annual report of State Commission.
106. Budget of Appropriate Commission.
107. Directions by Central Government.
108. Directions by State Government.
109. Directions to Joint Commission.

PART XI
APPELLATE TRIBUNAL FOR ELECTRICITY
110. Establishment of Appellate Tribunal.
111. Appeal to Appellate Tribunal.
112. Composition of Appellate Tribunal.
113. Qualifications for appointment of Chairperson and Member of Appellate Tribunal.
114. Term of office.
115. Terms and conditions of service.
116. Vacancies.
117. Resignation and removal.
117A. Qualifications, terms and conditions of service of Chairperson and Member.
118. Member to act as Chairperson in certain circumstances.
119. Officers and other employees of Appellate Tribunal.
120. Procedure and powers of Appellate Tribunal.
121. Power of Appellate Tribunal.
122. Distribution of business amongst Benches and transfer of cases from one Bench to another
Bench.
123. Decision to be by majority.
124. Right of appellant to take assistance of legal practitioner and of Appropriate Commission to
appoint presenting officers.
125. Appeal to Supreme Court.
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PART XII
INVESTIGATION AND ENFORCEMENT
SECTIONS
126. Assessment.
127. Appeal to Appellate Authority.
128. Investigation of certain matters.
129. Orders for securing compliance.
130. Procedure for issuing directions by Appropriate Commission.

PART XIII
REORGANISATION OF BOARD
131. Vesting of property of Board in State Government.
132. Use of proceeds of sale or transfer of Board, etc.
133. Provisions relating to officers and employees.
134. Payment of compensation or damages on transfer.

PART XIV
OFFENCES AND PENALTIES
135. Theft of Electricity.
136. Theft of electric lines and materials.
137. Punishment for receiving stolen property.
138. Interference with meters or works of licensee.
139. Negligently breaking or damaging works.
140. Penalty for intentionally injuring works.
141. Extinguishing public lamps.
142. Punishment for non-compliance of directions by Appropriate Commission.
143. Power to adjudicate.
144. Factors to be taken into account by adjudicating officer.
145. Civil court not to have jurisdiction.
146. Punishment for non-compliance of orders or directions.
147. Penalties not to affect other liabilities.
148. Penalty where works belong to Government.
149. Offences by companies.
150. Abetment.

SECTIONS
151. Cognizance of offences.
151A. Power of police to investigate.
151B. Certain offences to be cognizable and non-bailable.
152. Compounding of offences.

PART XV
SPECIAL COURTS
153. Constitution of Special Courts.
154. Procedure and power of Special Court.
155. Special Court to have powers of Court of Session.
156. Appeal and revision.
157. Review.

PART XVI
DISPUTE RESOLUTION
Arbitration
158. Arbitration.

PART XVII
OTHER PROVISIONS
Protective clauses
159. Protection of railways, highways, airports and canals, docks, wharfs and piers.
160. Protection of telegraphic, telephonic and electric signalling lines.
161. Notice of accidents and inquiries.
162. Appointment of Chief Electrical Inspector and Electrical Inspector.
163. Power for licensee to enter premises and to remove fittings or other apparatus of licensee.
164. Exercise of powers of Telegraph Authority in certain cases.
165. Amendment of sections 40 and 41 of Act 1 of 1894.

PART XVIII
MISCELLANEOUS
166. Coordination Forum.
167. Exemption of electric lines or electrical plants from attachment in certain cases.
168. Protection of action taken in good faith.
169. Members, officers, etc., of Appellate Tribunal, Appropriate Commission to be public servants.
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SECTIONS
170. Recovery of penalty payable under this Act.
171. Services of notices, orders or documents.
172. Transitional provisions.
173. Inconsistency in laws.
174. Act to have overriding effect.
175. Provisions of this Act to be in addition to and not in derogation of other laws.
176. Power of Central Government to make rules.
177. Powers of Authority to make regulations.
178. Powers of Central Commission to make regulations.
179. Rules and regulations to be laid before Parliament.
180. Powers of State Governments to make rules.
181. Powers of State Commissions to make regulations.
182. Rules and regulations to be laid before State Legislature.
183. Power to remove difficulties.
184. Provisions of Act not to apply in certain cases.
185. Repeal and saving.
THE SCHEDULE.

THE ELECTRICITY ACT, 2003
ACT NO. 36 OF 2003
[26th May, 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, rationalis ation of electricity tariff, ensuri ng 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:–
PART I
PRELIMINARY
1. 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 date1 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.
2. 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
sub-section (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;

1. 10th June, 2003 (Ss. 1 to 120 and ss. 122 to 185), vide notification No. S.O. 669(E), dated 10th June, 2003, see Gazette of
India, Extraordinary, Part II, sec. 3(ii).
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(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 lice nsee 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 162 and also includes Chief Electrical Inspector;
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(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 e lectricity 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 (1 of 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;
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(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 l ine
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 a 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 185;
(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 ” me ans 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;
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(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 case 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.
PART II
NATIONAL ELECTRICITY POLICY AND PLAN
3. 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 National Electricity Policy and tariff policy from time to
time.
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(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.
4. 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.
5. Na tional 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.
1[6. Joint responsibility of State Government and Central Government in rural electrification.–
The concerned State Government and the Central Government shall jointly endeavour to provide access
to electricity to all areas including villages and hamlets through rural electricity infrastructure and
electrification of households.]
PART III
GENERATION OF ELECTRICITY
7. 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.
8. Hydro-electric generation.–(1) Notwithstanding anything contained in section 7, any gene rating
company intending to set up 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, bef ore 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 po wer generation, consistent with the requirements of drinking water,

1. Subs. by Act 26 of 2007, s. 2, for section 6 (w.e.f. 15-6-2007).
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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 Governme nt, 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.
9. Captive generation.–(1) Notwithstanding anything contained in 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:
1[Provided further that no licence shall be required under this Act for supply of electricity generated
from a captive generating plant to any licensee in accordance with the provisions of this Act and the rules
and regulations made thereunder and to any consumer subject to the regulations made under
sub-section (2) of section 42.]
(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 f acility shall be
adjudicated upon by the Appropriate Commission.
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 thereunder.
(2) A generating company may supply electricity to any licensee in accordance with this Act and the
rules and regulations made thereunder 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.
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.

1. Ins. by Act 26 of 2007, s. 3 (w.e.f. 15-6-2007).

Explanation.–For the purposes of this section, the expr ession “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.
PART IV
LICENSING
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.
13. Power to exempt. –The Appropriate Commiss ion 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.
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 Ap propriate 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 (14 of 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
18

Corporation Act, 1948 , or in so far as they are not inconsistent with the provisions of this Act, shall
continue to apply to that Corporation:
Provided also that the Government company or the company referred to in sub -section (2) of section
131 of this Act and the company or companies created in pursuance of the Acts specified in the Schedule,
shall be deemed to be a licensee under this Act:
Provided also that the Appropriate Commission may grant a licence to two or more persons for
distribution of electricity through their own distribution system within the same area, subject to the
conditions that the applicant for grant of licence within the same area shall, without prejudice to the other
conditions or requirements under this Act, comply with the additional requirements 1[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:
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 and distribute electricity in a rural area to be
notified by the State Government, such person shall not require any licence for such generation and
distribution of electricity, but he shall comply with the measures which may be specified by the Authority
under section 53:
Provided also that a distribution licensee shall not require a licence to undertake trading in electricity.
15. Procedure for grant of licence .–(1) Every application under section 14 shall be made in such
form and in such manner as may be specified by the Appropriate Commission and shall be accompanied
by such fee as may be prescribed.
(2) Any person who has made an application for grant of a licence shall, within seven days after
making such application, publish a notice of his application with such particulars and in such manner as
may be specified and a licence shall not be granted–
(i) until the objections, if any, received by the Appropriate Commission in response to publication
of the application have been considered by it:
Provided that no objection shall be so considered unless it is received before the expiration of
thirty days from the date of the publication of the notice as aforesaid;
(ii) until, in the case of an application for a licence for an area including the whole or any part of
any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the
occupation of the Government for defence purposes, the Appropriate Commission has ascertained
that there is no objection to the grant of the licence on the part of the Central Government.
(3) 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,
as the case may be.
(4) The Central Transmission Utility or the State Transmission Utility, as the case may be, shall,
within thirty days after the receipt of the copy of the application referred to in sub -section (3), send its
recommendations, if any, to the Appropriate Commission:

1. Subs. by Act 57 of 2003, s. 2, for “(including the capital adequacy, creditworthiness, or code of conduct)” (w.e.f. 27-1-2004).

Provided that such recommendations shall not be binding on the Commission.
(5) Before granting a licence under section 14, the Appropriate Commission shall–
(a) publish a notice in two such daily newspapers, as that Commission may consider necessary,
stating the name and address of the person to whom it proposes to issue the licence;
(b) consider all suggestions or objections and the recommendations, if any, of the Central
Transmission Utility or the State Transmission Utility, as the case may be.
(6) Where a person makes an application under sub -section (1) of section 14 to act as a licen see,
the Appropriate Commission shall, as far as practicable, within ninety days afte r receipt of such
application,–
(a) issue a licence subject to the provisions of this Act and the rules and regulations made
thereunder; or
(b) reject the application for reasons to be recorded in writing if such application does not
conform to the provisions of this Act or the rules and regulations made thereunder or the
provisions of any other law for the time being in force:
Provided that no application shall be rejected unless the applicant has been given an opportunity of
being heard.
(7) The Appropriate Commission shall, immediately after issue of a licence, forward a copy of the
licence to the Appropriate Government, Authority, local authority, and to such other perso n as the
Appropriate Commission considers necessary.
(8) A licence shall continue to be i n force for a period of twenty -five years unless such licence is
revoked.
16. Condition s of licence .–The Appropriate Commission may specify any general or specific
conditions which shall apply either to a licensee or class of licensees and such conditions shall be deemed
to be conditions of such licence:
Provided that the Appropriate Commission shall, within one year from the appointed date, specify
any general or sp ecific conditions of licence applicable to the licensees referred to in the first, second,
third, fourth and fifth provisos to section 14 after the expiry of one year from the commencement of this
Act.
17. Licensee not to do certain things .–(1) No licensee shall, without prior approval of the
Appropriate Commission,–
(a) undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any
other licensee; or
(b) merge his utility with the utility of any other licensee:
Provided that nothing contained in this sub-section shall apply if the utility of the licensee is situate in
a State other than the State in which the utility referred to in clause (a) or clause (b) is situate.
(2) Every licensee shall, before obtaining the approval un der sub-section (1), give not

Excerpt shown. Open the full act in Lexace.

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