LexThe KARNATAKA ELECTRICITY REFORM ACT, 1999
Karnataka · state statute
Open in Lexace · Ask the AI about this act Electricity Reform [1999: KAR. ACT 25 394
THE KARNATAKA ELECTRICITY REFORM ACT, 1999
ARRANGEMENT OF SECTIONS
Statement of Objects and Reasons:
Sections :
PART I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
PART II
KARNATAKA ELECTRICITY REGULATORY COMMISSION
3. Establishment and constitution of the Commission.
4. Constitution of the selection committee to select members.
5. Conditions for appointment as member of the Commission.
6. Term of office, conditions of service etc. of members.
7. Removal of Members.
8. Appointment of the Secretary, staff, consultants etc.
PART III
PROCEEDINGS, POWERS AND FUNCTIONS OF THE COMMISSION
9. Proceedings of the Commission.
10. Powers of the Commission.
11. Functions of the Commission.
PART IV
POWERS OF THE STATE GOVERNMENT
12. General Powers of the State Government.
PART V
REORGANISATION OF THE KARNATAKA ELECTRICITY BOARD AND THE TRANSFER
OF BOARD'S FUNCTIONS, TRANSFER OF PROPERTIES, LIABILITIES ETC.
13. Karnataka Power Transmission Corporation.
14. Reorganisation of the Karnataka Electricity Board.
15. Provisions relating to Personnel.
16. Variation of transfers.
1999: KAR. ACT 25] Electricity Reform 395
PART VI
GENERATING COMPANIES AND GENERATING STATIONS
17. Regulation of generating companies and stations.
PART VII
LICENSING OF TRANSMISSION AND SUPPLY
18. Requirement of Licence.
19. Grant of licenses by the Commission.
20. Exemptions from the requirement of licence.
21. General duties and powers of the licensees.
22. Revocation of Licenses.
23. Amendment of licenses.
24. Provisions where the licence is revoked.
25. General restriction on the licensees.
26. Annual accounts of the licensee.
PART VIII
TARIFFS AND FINANCING THE LICENSEES
27. Tariffs.
28. Finances of the Licensees.
PART IX
COMMISSION'S POWER TO PASS ORDERS AND ENFORCE DECISIONS
29. Orders for securing compliance.
30. Final orders for securing compliance.
31. Effect and enforcement of interim and final orders and emergency
provisions.
32. Fines and charges.
33. General control of the Commission.
PART X
ADVISORY COMMITTEE, CONSUMER CONSULTATION, DISCLOSURE OF
INFORMATION, STANDARD OF PERFORMANCE ETC
34. Advisory Committee.
35. Disclosure of Information.
36. Electricity supply and standard of performance.
37. Information with respect to level of performance.
Electricity Reform [1999: KAR. ACT 25 396
38. Restriction on disclosure of Information.
PART XI
ARBITRATION AND APPEALS
39. Arbitration by the Commission.
40. Appeals from the decision of the Electrical Inspectors.
41. Appeals against the order of the Commission.
PART XII
OFFENCES AND PENALTIES
42. Penalty for contravention of section 18.
43. Penalty for contravention of other provisions.
44. Offences by Companies.
45. Power to compound offences.
46. Cognizance of offences.
47. Penalties and proceedings not to prejudice other actions.
PART XIII
MISCELLANEOUS
48. Recovery of fees, fines and charges.
49. Application of fine and charges.
50. No part of the fines or penalties to be passed on.
51. Protection for acts done in good faith.
52. Bar of jurisdiction and saving of consumer actions.
53. Power to remove difficulties.
54. Proceedings before the commission to be Judicial proceedings.
55. Members and staff of commission to be public servants.
56. Power to make regulations.
57. Power to make rules.
PART XIV
EFFECT ON EXISTING CENTRAL LEGISLATION
58. Effect of the Act on the Indian Electricity Act, 1910 and the
Electricity (Supply) Act, 1948.
59. Savings.
60. Repeal and Savings.
SCHEDULE.
1999: KAR. ACT 25] Electricity Reform 397
STATEMENT OF OBJECTS AND REASONS
Act 25 of 1999.- It is considered necessary to enact a legislation to
provide for:
(i) establishment of the Karnataka Electricity Regulatory Commission for
the State Karnataka with powers to regulate purchase, distribution, supply
and utilisation of electricity, tariff and charges payable, to promote efficiency,
economy and safety in the use of electricity and to issue licenses and to do
certain other matters.
(ii) constitution of Selection Committee to select members of the
Karnataka Electricity Regulatory Commission.
(iii) incorporation of the Karnataka Power Transmission Corporation with
the principle object of engaging in business of purchase , transmission sale
and supply of electricity.
(iv) reorganisation of the Karnataka Electricity Board and transfer of
Board functions and its properties and liabilities to the Karnataka Power
Transmission Corporation;
(v) regulation of generation companies and generating station by the
Karnataka Electricity Regulatory Commission;
(vi)Licensing transmission and supply of electricity by the Commission;
(vii) Laying down the methodology and terms and conditions for
determination of revenue of the licensee and designing tariffs;
(viii) Securing compliance of the order of the Commission;
(ix) Constitution of Advisory Committee to advise on major questions of
policy relating to the electricity supply industries in the State and on any
other matter put before it;
(x) Penalties for contravention of the provisions of the act or the
regulations made under the Act, or the Indian Electricity Act, 1910 or
Electricity Supply Act, 1948 or the rules made under those Acts; and
(xi) Certain other incidental and consequential matters .
As the matter was urgent and the Karnataka Legislative Council was
not in session, the Karnataka Electricity Reform Ordinance, 1999
(Karnataka Ordinance 3 of 1999) was promulgated to achieve the above
object.
This Bill seeks to replace the said Ordinance.
(Obtained from L.C. Bill No. 9 of 1999).
Electricity Reform [1999: KAR. ACT 25 398
II
Amending Act 26 of 2001.- It is considered necessary to amend the
Karnataka Electricity Reforms Act, 1999:-
(i) to provide for determination of the amount payable by the
State Government under section 12;
(ii) to remove minor ambiguities so that the enactment will be
consistent with the stated object of electricity reform.
Certain other consequential changes are also made.
Hence the Bill.
(L.A. Bill No. 15 of 2001 File No. DPAL 6 SHASANA 2001)
III
Amending Act 4 of 2005.- The Mangalore Electricity Supply
Company, one of the four ESCOMS in the State has undertaken power
supply in the districts of Mandya, Mysore, Chamarajnagar, Kodagu, Hassan,
Udupi, Dakshina Kannada, Shimoga and Chickmagalore. Since, it was felt
difficult to give adequate service to the consumers scattered over a wide
area, the State Government have vide Government Order No.EN 98 PSR
2004, dated 19.08.2004 established a new electricity distribution company
called “The Chamundeshwari Electricity Supply Company” with
headquarters at Mysore and with jurisdiction comprising the districts of
Mysore, Chamrajnagar, Mandya and Hassan, In order to enable the new
Company to function on equal footing with the other ESCOMS, it is essential
to transfer all assets and liabilities in respect of the districts of Mysore,
Chamarajnagar, Mandya and Hassan from MESCOM to Chamundeshwari
Electricity Supply Company by suitabl y amending the Karnataka Electricity
Reforms Act, 1999.
In order to enable immediate functioning of the Chamundeshwari
Electricity Supply Company, the Karnataka Electricity Reforms
(Amendment) Ordinance, 2004 was promulgated on 24.12.2004 to amend
section 14 of the Karnataka Electricity Reforms Act, 1999. This bill seeks to
replace the said Ordinance.
Hence the Bill.
(LC Bill No.1 of 2005)
1999: KAR. ACT 25] Electricity Reform 399
KARNATAKA ACT NO. 25 OF 1999
(First Published in the Karnataka Extra-ordinary Gazette on Twenty First of
August, 1999)
THE KARNATAKA ELECTRICITY REFORM ACT, 1999
(Received the assent of the President on Twentieth day of August, 1999)
(As amended by Karnataka Act 26 of 2001 and 4 of 2005)
An Act to provide for the constitution of an Electricity Regulatory
Commission (‘The Commission’) for the State of Karnataka; to provide for
the restructuring of the electricity industry in the State, the corporatisation of
the Karnataka Electricity Board and the rationalisation of the generation,
transmission, distribution and supply of electricity in the State; to provide for
avenues for participation of private sector entrepreneurs in the electricity
industry in the State and generally for taking measures conducive to the
development and management of the electricity industry in the State in an
efficient, economic and competitive manner to provide reliable quality
power and to protect the interest of the consumer including vesting in the
Commission the powers to regulate the activities of the power sector in the
State and for matters connected therewith or incidental thereto;
Be it enacted by the State Legislature of Karnataka in the Fiftieth
Year of the Republic of India, as follows:-
PART I
PRELIMINARY
1. Short title, extent and commencement.- (1) This Act may be
called the Karnataka Electricity Reform Act, 1999.
(2) It extends to the whole of the State of Karnataka.
(3) It shall be deemed to have come into force with effect from the
First day of June, 1999.
2. Definitions.- In this Act , unless the context otherwise requires,-
(a) “area of transmission” means the area within which the holder of
a transmission licensee is, for the time being, authorised by license to
transmit energy;
(b) “ Board” means the Karnataka Electricity Board;
(c) “Chairman” means the Chairman of the Commission;
(d) “Commission” means the Karnataka Electricity Regulatory
Commission constituted under sub-section (1) of section 3;
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(e) “license” means a license granted under Section 19;
(f) “licensee” or “license holder” means any person licensed under
this Act;
(g) “Licensing Authority” means the Commission, which is
empowered to issue a license under Part VII of this Act;
(h) “local authority” means the Municipal Corporations, Municipal
Councils, Town Panchayaths, Zilla P anchayaths, Taluk Panchayaths and
Grama Panchayaths;
(i) “member” means a member of the Commission and shall include
the Chairman of the Commission;
(j) “Regulations” mean regulations made by the Commission;
(k) “selection committee” means the selection committee constituted
under section 4;
(l) “supply license” means a license granted under sub-section (1)
(b) of section 19;
(m) “KPTC” means the Karnataka Power Transmission Corporation
incorporated as a transmission company under the Companies Act, 1956.
(n) “transmission license” means a license granted under sub-
section (1) (a) of section 19;
(o) “transmit” in relation to electricity, means the transportation or
transmission of electricity by means of a system operated or controlled by a
licensee which consists, wholly or mainly, of extra high voltage and extra
high tension lines and electrical plant and is used for transforming and for
conveying and/or transferring electricity from a generating station to a sub-
station, from one generating station to another or from one sub-station to
another or otherwise from one place to another;
(p) Words and expressions used but not defined in this Act and
defined in the Electricity (Supply) Act, 1948 (Central Act No. 54 of 1948),
have the meanings respectively assigned to them in that Act;
(q) Words and expressions used but not defined either in this Act or
in the Electricity (Supply) Act, 1948 (Act No. 54 of 1948) and defined in the
Indian Electricity Act, 1910 (Act No.IX of 1910), have the meanings
respectively assigned to them in that Act;
1999: KAR. ACT 25] Electricity Reform 401
PART II
KARNATAKA ELECTRICITY REGULATORY COMMISSION
3. Establishment and constitution of the Commission .- (1) For
the purposes of this Act within three months from the date of
commencement of this Act, the State Government shall establish by
notification, a Commission to be known as the Karnataka Electricity
Regulatory Commission, which shall be a body corporate with perpetual
succession and a common seal, with power to acquire, hold and dispose of
property, movable and immovable and shall, by the said name, be entitled to
sue and be sued.
(2) The Commission shall consist of three members to be appointed
by the State Government from persons selected by the selection committee
constituted for the purpose, in the manner provided in section 4 and one of
them shall be nominated as Chairman by the State Government.
(3) When the Chairman is unable to discharge the functions owing
to absence, illness or any other cause, the next senior member shall act as
the Chairman till the day the Chairman re-assumes the charge.
(4) The seniority of members shall be reckoned from the date of
their appointment as indicated in their order of appointment. In case, two
members are appointed at the same time, the State Government while
making the appointment shall determine the seniority between them.
(5) No act or proceedings of the Commission shall be invalid by
reason only of the existence of any vacancy among its members or any
defect in the constitution thereof.
(6) The Chairman shall be the Chief Executive of the Commission.
4. Constitution of the selection committee to select members.-
(1) The State Government shall expeditiously constitute a selection
committee, as often as may be required, to select persons for appointment
as members.
(2) The selection committee shall consist of three members,
namely:-
(a) A retired Chief Justice of a High Court or a retired Judge of the
Supreme Court as Chairman;
(b) The Chief Secretary of the Government of Karnataka as a
Member;
Electricity Reform [1999: KAR. ACT 25 402
(c) The Chairman of the Central Electricity Authority or a person
who has worked as Chairman of an Electricity Board for not less than three
years as a Member; and the Secretary, in-charge of the Energy Department,
Government of Karnataka, shall act as the convenor of the selection
committee.
(3) (a) The selection committee shall act expeditiously and shall
generally finalise the selection to enable the State Government to make the
appointment in time for the new members to take effective charge at the
expiry of the term of the retiri ng member and without delay and generally
within two months of vacancy arising for reasons other than the expiry of the
term;
(b) The method and manner of the selection and appointment of
members and designation of one of the members as Chairman shall be as
may be prescribed;
(c) For the purposes of selection, the selection committee may call
for application from individuals or nomination from such sources and in such
other manner as the selection committee may consider appropriate.
(4) The selection committee shall select two suitable persons for
each vacancy in the Commission who have such qualification and
experience as provided in this Act and notify the State Government of the
persons shortlisted by the selection committee. The State Government shall
appoint one of the two persons shortlisted by the selection committee as a
member within fifteen days of receipt of the recommendations of the
selection committee.
(5) All decisions of the selection committee shall be by majority.
5. Conditions for appointment as member of the Commission .-
(1) The members shall be persons of ability, integrity and standing who have
adequate knowledge and experience of, and have demonstrated capacity in
dealing with matters relating to, engineering, finance, economics,
commerce, law or administration and further, that at all times,-
(a) one member shall be a graduate electrical engineer with at least
twenty-five years of experience of either generation, transmission or
distribution of electricity and having worked in a senior position in the said
field;
(b) two members shall have qualification in the field of law, finance,
economics, commerce, or administration with at least twenty-five years of
1999: KAR. ACT 25] Electricity Reform 403
working experience and shall have worked in a senior position in the said
field:
Provided that at any point of time the commission shall not consist of more
than one member from the same discipline.
(2) A person shall be disqualified from being appointed as a
member if he is a Member of Parliament or of any State Legislature or of
any local authority or holds any post in a political party.
(3) The persons who are considered for appointment as members,
shall notify the convenor of the selection committee,-
(a) of any office, employment or consultancy agreement or
arrangement which he has in his own name or in any firm, association of
persons or body corporate, or in the names of any relative, carrying on any
of the following businesses or any financial interest therein:-
(i)generation, transmission, distribution or supply of electricity;
(ii)manufacture, sale or supply of any fuel for generation of electricity;
(iii)manufacture, sale, lease, hire, supply or otherwise dealing in
machinery, plant, equipment, apparatus or fittings for the generation,
transmission, distribution, supply or use of electricity; and
(iv)any entity providing professional services to any of the businesses
referred to in clauses (i), (ii) and (iii) above; and
(b) of such other details and information as may be prescribed.
Explanation.- For the purpose of this section, the term “relative” shall
have the same meaning as defined under section 6 of the Companies Act,
1956 and a member and his relatives shall not be taken as holding financial
interest in any business of a public company if they are shareholders
holding in aggregate less than two percent of the issued share capital in that
public company.
(4) The details received from the persons shall be placed for
consideration of the selection committee at the time of selection and
recommendation of the persons for appointment as member.
(5) Before recommending any person as a member, the selection
committee shall satisfy itself that the person does not have any financial or
other interest as referred to in sub-section (3) or otherwise which is likely to
affect prejudicially his functions as a member.
Electricity Reform [1999: KAR. ACT 25 404
(6) Each member shall before taking charge of the office as member
or within such time not exceeding three months after taking charge as may
be allowed by the State Government on the recommendation of the
selection committee, divest himself from the interest in the businesses
mentioned in sub-section (3) as a condition of his appointment.
(7) If a person to be appointed as a member holds any office under
the State or Central Government or any public sector corporation or any
Government body or is otherwise gainfully employed or engaged in the
service of any person he shall submit his resignation or take voluntary
retirement from that service.
(8) A member, at any time within a period of two years after he
ceases to be a member for any reason whatsoever, shall not be appointed
in the service of the State Government or in any body corporate or institution
or undertaking owned or controlled by the State Government or body
dealing with power sector, in Karnataka.
(9) So long as a person holds the office of the member, and for a
period of two years after he ceases to be a member for any reason
whatsoever, he shall not acquire, hold or maintain, directly or indirectly, any
office, employment or consultancy arrangement or businesses mentioned in
sub-section (3) of this section within or outside the State, and if he acquires
any such interest involuntarily or by way of succession or testamentary
disposition, he will divest himself from such interest within a period of three
months of such interest being acquired.
(10) A member, after he ceases to be a member for any reason
whatsoever, shall not, for a period of three years,, appear or otherwise
represent any person including the Commission, before the Commission.
6. Term of office, conditions of service etc. of members.- (1)
Every member shall hold office for a period of five years from the date of his
appointment as member or until the age of sixty-five years whichever is
earlier and he shall not be eligible for reappointment in the Commission at
any time after the expiry of his term of appointment:
Provided that a member shall be eligible for appointment as
Chairman subject to his combined tenure in the Commission as Member
and Chairman shall not exceed five years :
1999: KAR. ACT 25] Electricity Reform 405
Provided further that the first three members shall be appointed for
varying periods of three years, four years and five years respectively so as
to avoid the retirement of all the first appointed members at the same time:
Provided also that no person shall be appointed as member after he
has completed the age of sixty-two years.
(2) The Chairman and other members shall receive such
remuneration and other allowances and shall be governed by such
conditions of service as may be prescribed :
Provided that the conditions of service once prescribed shall not be varied to
the disadvantage of the members during the tenure of their appointment.
(3) The Chairman and every other member shall, before entering
upon his office, make and subscribe to an oath of office and of secrecy in
such form, in such manner and before such authority as may be prescribed.
7. Removal of Members .- (1) Subject to the provisions of sub-
sections (2) and (3), the Governor may remove from office any member,
who,-
(a) has been adjudged an undischarged insolvent; or
(b) has been convicted of an offence involving moral turpitude; or
(c) has become physically or ment ally incapable of acting as such
member; or
(d) has without reasonable cause, refused or failed to discharge his
functions for a period of atleast three months; or
(e) ceases to fulfill any of the conditions of his appointment as
member; or
(f) has acquired such financial or other interest that can affect
prejudicially his functions as a member; or
(g) has conducted himself in a manner or has so abused his
position as to render his continuance in office prejudicial to the
public interest or to the objects and purpose of the Act .
(2) (a) Except where a member admits the charge in writing, no
member shall be removed from his office on the grounds specified in
clauses (c), (d), (e), (f) and (g) of sub-section (1) until a sitting judge of the
High Court of Karnataka, as recommended by the Chief Justice of the High
Court at the relevant time, has carried out an investigation and has
forwarded a report to the Governor;
Electricity Reform [1999: KAR. ACT 25 406
(b) Pending the investigation against a member under clause (a),
the Governor may suspend the member from acting as Chairman or
member, if the Judge appointed under clause (a) to carry out the
investigation recommends the suspension.
(3) The Governor shall act in accordance with the recommendation
under sub-section (2) and communicate the decision to the member
concerned within a period of thirty days of the receipt of the report under
sub-section (2).
(4) A member who has been removed shall not be eligible for re-
appointment as a member or in any other capacity in the Commission or in
the State Government or in any State Government undertakings, at any
time.
(5) If the member removed under this section is the Chairman, he
shall cease to be the Chairman.
(6) The vacancy caused by the removal of the member shall be
filled in the same manner as provided for the appointment of a member or
designation of the Chairman.
8. Appointment of the Secretary, staff, consultants etc.- (1)
The Commission shall appoint a person as Secretary for a period of not
exceeding five years at a time to exercise and perform under control of the
Chairman, such duties and powers as may be specified by regulations made
by the Commission.
(2) The Commission shall have a senior officer to represent the
common interest of the consumers in all matters, hearings and proceedings
before the Commission :
Provided that such appointment of the senior officer to represent the
interests of the consumers shall be in addition to, and not in derogation in
any manner of, the other rights of the individual consumers and also of the
representations by consumer fora and organisations before the
Commission, as may be recognised by the Commission in the regulations or
otherwise.
(3) The Commission shall, with the approval of the State
Government, determine the number, nature and categories of other officers
and employees required to assist the Commission in the discharge of its
functions.
1999: KAR. ACT 25] Electricity Reform 407
(4) The salaries and allowances payable to the members and the
administrative expenses, including salaries, allowances and pensions
payable to, or in respect of, the Secretary, officers and other employees of
the Commission shall be charged to the Consolidated Fund of the State.
(5) The method and manner of selection of the Secretary, officers
and other employees and the terms and conditions of their service may be
specified by regulation by the Commission with prior approval of the State
Government.
(6) The Commission shall be entitled to appoint, from time to time,
consultants required to assist the Commission in the discharge of its
functions on terms and conditions as may be specified.
(7) The Commission shall formulate annual budgets as provided in
the schedule.
PART III
PROCEEDINGS, POWERS AND FUNCTIONS OF THE COMMISSION
9. Proceedings of the Commission .- (1) The headquarters of the
Commission shall be at Bangalore, but the Commission shall be entitled to
conduct its proceedings, consultations and hearings in other places in the
State.
(2) (a) The Commission shall have the exclusive power to make
regulations for the conduct of its proceedings and discharge of its functions
and all such regulations made shall be notified;
(b) Unless otherwise specified by the Commission, all hearings and
proceedings before the Commission shall be held in public.
(3) In case of a difference of opinion among the members of the
Commission, the opinion of the majority shall prevail and the opinion of the
Commission shall be expressed in terms of the views of the majority. Each
member of the Commission shall have one vote only.
(4) The Chairman shall have no casting or second vote except that
in the event of there being two members only by reason of vacancy in the
office of the Chairman or of a member or disability of the nature that the
Commission cannot hold the proceedings with all the three members
present, the Chairman or the senior most member acting as Chairman, as
the case may be, shall have a second and casting vote only during the
period of such vacancy or disability.
(5) The quorum for the meeting of the Commission shall be two :
Electricity Reform [1999: KAR. ACT 25 408
Provided that for a meeting of the Commission to review any
previous decision taken by the Commission or for consideration of any issue
which could not be decided on account of equality of votes in favour of, or
against, the resolution proposed, the quorum for the meeting shall be all
members of the Commission being personally present.
(6) The Chairman may instruct the Secretary to call a meeting of the
Commission to be held at such time and at such place as the Chairman may
direct. In addition, any member may request the Chairman to convene a
meeting at any time by sending a notice in writing to the Chairman. The
notice of all meetings shall be given to the members in writing.
(7) The Commission shall be entitled to decide urgent matters by
circulation of the papers to members.
(8) All decisions, directions and orders of the Commission shall be
in writing and shall be supported by reasons. The decisions, directions and
orders of the Commission shall be available for inspection by any person
and copies of the same shall also be made available in a manner the
Commission may by regulations specify.
10. Powers of the Commission .- (1) The Commission shall, for
the purposes of any inquiry or proceedings under this Act, have the powers
as are vested in a Civil Court under the Code of Civil Procedure, 1908
(Central Act 5 of 1908), while trying a suit in respect of the following matters,
namely:-
(a) the summoning and enforcing of attendance of any witness and
examining him on oath;
(b) the discovery and production of any document or other material
object producible as evidence;
(c) the reception of evidence on affidavits;
(d) the requisition of any public record from any court or office;
(e) the issue of commission for examination of witnesses;
(f) the appearance of parties and consequences of non-
appearance;
(g) the grant of adjournments at the hearing; and
(h) review of its decisions, directions and orders.
(2) The Commission shall have the power to require any person,-
1999: KAR. ACT 25] Electricity Reform 409
(a) to produce before and allowed to be examined and kept by, an
officer of the Commission specified in this behalf, such books, accounts, or
other documents in the custody or under the control of, the person so
required as may be specified or described in the requisition, being
documents relating to any matter concerning the generation, transmission,
distribution and supply or use of electricity, the functioning of any
undertaking involved in the above areas and other matters, the examination
of which the Commission considers necessary or relevant for the purposes
of this Act or the discharge of the functions by the Commission under this
Act ; and
(b) to furnish to an officer so specified such information as may be
required for the purposes of this Act or such other information as may be in
his possession in relation to any activity carried on by any other person.
(3) For the purpose of enforcing the attendance of witnesses the
local limits of the jurisdiction of the Commission shall be the limits of the
territory of India.
(4) Where, during any inquiry or proceedings under this Act, the
Commission has any grounds to believe that any books or papers or
documents thereof, or relating to any unit or person in relation to which such
inquiry is being made or which the owner of such unit may be required to
produce in such inquiry, are being or may be, destroyed, mutilated, altered,
falsified or secreted, it may, by a written order authorise any officer of the
Commission to exercise the powers of entry, search and seizure as may be
exercised by an Inspector appointed for inspection under sections 240 and
240-A of the Companies Act, 1956 (Central Act 1 of 1956).
(5) Notwithstanding anything contained in any other law for the time
being in force, the Commission may, by a general or special order, call upon
any person including the generating companies or the licensees to furnish to
the Commission periodically or as and when required, any information
concerning the activities carried on by such person relating to generation,
transmission, distribution and supply or use of electricity, the connection
between such person and any other person or undertaking including such
other information relating to the organisation and the, business, cost of
production and other requirements as may be prescribed, to enable the
Commission to carry out its functions under this Act.
(6) The Commission shall be entitled to exercise the above
mentioned powers to call for information, details, books, accounts and other
Electricity Reform [1999: KAR. ACT 25 410
documents from any person and make inquiry for the purposes of providing
the same to the Central Electricity Authority, the Central Electricity
Regulatory Commission, the Central Government and the State
Government or other Government authorities.
(7) In the discharge of its function, the Commission shall be entitled
to and shall consult, to the extent the Commission considers appropriate
from time to time, such persons or group of persons who may be affected
or are likely to be affected by the decisions of the Commission.
(8) All persons to whom notices may be issued pursuant to this
Act, shall duly, faithfully and effectively furnish the information, details,
books, accounts and other documents, which the Commission directs to be
provided and the persons shall be proceeded with and punishable for any
failure or delay to comply with such requirements, directions and orders
issued by the Commission.
(9) Notwithstanding anything contained in sections 12 to 16 (both
inclusive) and sections 18 and 19 of the Indian Electricity Act, 1910, for the
placing of the electric supply lines, appliances and apparatus for
transmission, distribution and supply of energy, the Commission may, by
order in writing, confer upon licensees or any other person engaged in the
business of transmission, distribution or supply of energy to the public under
the Act, subject to such conditions and restrictions as the Commission may
provide, any of the powers which the telegraph authority possesses under
the Indian Telegraph Act, 1885 with respect to placing of telegraph lines and
post.
11. Functions of the Commission .- (1) Subject to the provisions
of this Act, the Commission shall be responsible to discharge, amongst
others, the following functions, namely:-
(a) to regulate the purchase, distribution, supply and utilization of
electricity, the quality of service, the tariff and charges payable keeping in
view the interest of the consumer as well as the consideration that the
supply and distribution cannot be maintained unless the charges for the
electricity supplied are adequately levied and duly collected;
(b) to promote efficiency, economy and safety in the use of the
electricity in the State including and in particular, in regard to quality,
continuity and reliability of service, the standard of performance by the units
engaged in the electricity supply industry in the State, the efficient utilisation
1999: KAR. ACT 25] Electricity Reform 411
and conservation of energy, appropriate demand side management and
reduction of wastes and losses in the use of electricity and to enable all
reasonable demands for electricity to be met;
(c) to issue licenses in accordance with the provisions of this Act
and determine the conditions to be included in the licenses;
(d) to regulate the working of the licensees and to promote their
working in an efficient, economical and equitable manner;
(e) to regulate the assets, properties and interest in properties
concerning or related to the electricity industry in the State;
(f) to aid and advise, in matters concerning electricity generation,
transmission, distribution and supply in the State;
(g) to promote competitiveness and progressively involve the
participation of private sector, while ensuring fair deal to the customers;
(h) to collect data and forecast on the demand for, and use of,
electricity and to require the licensees to collect such data and forecast;
(i) to require licensees to formulate prospective plans and schemes
in co-ordination with others for the promotion of generation, transmission,
distribution and supply of electricity;
(j) to set appropriate codes of conduct and standards for the
electricity industry in the State and standards of service to the consumers
by licensees;
(k) to arbitrate or to nominate arbitrator (s) in matters of disputes
and difference between licensees in accordance with the provisions of this
Act ;
(l) to coordinate with environmental regulatory agencies and to
evolve policies and procedures for appropriate environmental regulations of
electricity sector and utilities in the State; and
(m) to undertake all incidental or ancillary functions connected with
the electricity sector.
(2) The Commission shall always act in a manner consistent with
the objectives and purposes for which the Commission has been
established as an independent statutory body corporate and all acts,
decisions and orders of the Commission shall be pursuant to achieving and
shall seek to achieve such objectives and purposes.
Electricity Reform [1999: KAR. ACT 25 412
(3) Notwithstanding the provisions of section 52 of the Indian
Electricity Act, 1910 (Central Act 9 of 1910) or the provisions of section 3 (1)
(ii) and section 76 of the Electricity (Supply) Act, 1948, the Commission shall
have the power to act as arbitrator or nominate arbitrator or arbitrators to
adjudicate and settle disputes arising between licensees in accordance with
the regulations and this shall be a condition in all licences granted under this
Act .
PART IV
POWERS OF THE STATE GOVERNMENT
12. General powers of the State Government.- (1) The State
Government shall have the power to issue policy directives on matters
concerning electricity in the State including the overall planning and co-
ordination :
Provided that such policy directives shall be consistent with the objectives
sought to be achieved by this Act and accordingly shall not adversely affect
or interfere with the functions and powers of the Commission including but
not limited to the determination of the structure of tariffs for supply of
electricity to various classes of consumers :
Provided further that if the State Government requires the grant of
any subsidy to any consumer or class of consumers in the tariff determined
by the Commission under Part VIII, the State Government shall pay the
amount to compensate the person affected by the grant of subsidy in the
manner the Commission may direct, as a condition for the licensee or any
other person concerned to implement the subsidy provided for by the State.
1 [Provided also that the commission shall determine the amount
payable by the State Government under the second proviso and the terms
and conditions and time within which such amount has to be paid to
implement the State Government’s stated policy for specified consumers or
class of consumers.]1
1. Inserted by Act 26 of 2001 w.e.f 10.11.2001 wide notification No. DE 61 PSR 2001 dated:
9.11.2001.
(2) The State Government shall consult the Commission in relation to
any legislative proposals enacted affecting the electricity sector and shall
duly take into account the recommendation, if any, given by the Commission
within such reasonable time.
1999: KAR. ACT 25] Electricity Reform 413
PART V
REORGANISATION OF THE KARNATAKA ELECTRICITY BOARD AND THE TRANSFER
OF BOARD'S FUNCTIONS, TRANSFER OF PROPERTIES, LIABILITIES ETC.
13. Karnataka Power Transmission Corporation.- (1) Not later
than sixty days from the date of commencement of this Act, the State
Government shall cause a company to be incorporated under the
provisions of the Companies Act, 1956 to be known as the Karnataka Power
Transmission Corporation, (KPTC) with the principal objects of engaging in
the business of purchase, transmission, sale and supply of electrical energy.
(2) Subject to the provisions of section 12, KPTC shall be the
principal company to undertake all planning and co-ordination concerning
the electricity. KPTC shall also be the principal company to undertake
transmission and work connected with transmission, determining the
electricity requirements in the State in co-ordination with the generating
companies, State Government, the Commission, the Regional Electricity
Board and the Central Electricity Authority.
(3) The KPTC shall 1[xxx]1 be responsible for the extra high voltage
transmission system operation and shall operate the power system in an
efficient manner.
1. Omitted by Act 26 of 2001 w.e.f 10.11.2001.
(4) The KPTC shall undertake the functions specified in this section
and such other functions as may be assigned to it under the license to be
granted to it by the Commission under this Act.
(5) Upon the grant of license to the KPTC under chapter VII, the
KPTC shall discharge such powers, duties and functions of the Board
including those under the Indian Electricity Act, 1910 and the Electricity
(Supply) Act, 1948 or the rules framed thereunder, as may be specified in
the license and it shall be the obligation of the KPTC to undertake and duly
discharge the powers, duties and functions so assigned.
(6) Subject to sub-sections (1), (2) and (3) and subject to the overall
supervision and control of the KPTC, a number of subsidiary or associated
transmission
1[xxx]1 companies may be established in the State and the
Commission may grant licenses under the terms of this Act to such
transmission 1[xxx]1 companies, in consultation with KPTC.
1. Omitted by Act 26 of 2001 w.e.f 10.11.2001.
Electricity Reform [1999: KAR. ACT 25 414
14. Reorganisation of the Karnataka Electricity Board.- (1) On
and with effect from the date on which a transfer scheme prepared by the
State Government to give effect to the object and purposes of this Act is
published or such further date as may be prescribed (hereinafter referred to
as the effective date of the first transfer), any property, interest in property,
rights and liabilities which immediately before the effective date of first
transfer belong to the Board shall vest in the State Government on such
terms as may be agreed between the State Government and the Board.
(2) Any property, interest in property, rights and liabilities vested in
the State Government under sub-section (1) or part thereof may be revested
by the State Government in the KPTC or any generating company or
companies in accordance with the transfer scheme published under sub-
section (1) along with such other property, rights and liabilities of the State
Government as may be specified in such scheme, on such terms and
conditions as may be agreed between the State Government and the KPTC
or any generating company or companies, as the case may be.
(3) From the effective date of first transfer of properties etc., to the
KPTC, the Board shall stand dissolved. The Chairman and Members of the
Board shall be deemed to have vacated their office. Such of the functions,
duties, rights and powers exercisable by the Board under the Indian
Electricity Act, 1910 or Electricity (Supply) Act, 1948 or any rule framed
thereunder as the State Government may by notification specify shall be
exercisable by the KPTC or any generat ing company or companies, as the
case may be, from the effective date of first transfer.
(4) Notwithstanding anything in this section, where,-
(a) the transfer scheme involves the transfer of any property or rights to any
person or undertaking not wholly owned by the State Government, the
scheme shall give effect to the transfer only for fair value to be paid by the
transferee to the State Government; and
(b) a transaction of any description is effected in pursuance of a
transfer scheme, it shall be binding on all persons including third parties.
(5) The State Government may, after consulting the KPTC 1[or a
licensee as the case may be] 1, KPTC require the 1[or a licensee as the case
may be] 1 to draw up a transfer scheme to vest in a further licensee (the
“transferee licensee”), any of the function including a distribution function,
any property, interest in property, rights and liabilities which have been
1999: KAR. ACT 25] Electricity Reform 415
vested in the KPTC 1[or a licensee as the case may be] 1 under this section
and publish the same as the scheme of transfer under this Act. The transfer
scheme to be notified under this sub section shall have the same effect as
the transfer scheme under sub section (2) and shall be effective from the
date specified (effective date of second transfer).
1. Inserted by Act 4 of 2005 w.e.f. 24.12.2004
(6) A transfer scheme under this section may, amongst others,.-
(a) define the property, interest in property, rights and liabilities to be
allocated,-
(i) by specifying or describing the property, rights and liabilities in
question;
(ii) by referring to all the property, interest in property, rights and
liabilities comprised in a specified part of the transExcerpt shown. Open the full act in Lexace.