Licensing Under Electricity Act, 2003: Sections 12-24

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Licensing under Electricity Act, two thousand three

Sections twelve to twenty-four

One. Why licensing is needed

The Electricity Act, two thousand three de-licensed generation, but kept some activities under licence because they directly affect public supply, infrastructure, safety, consumers and market control.

Under Section twelve, licence is required for:

One. Transmission - carrying electricity through high-voltage lines.

Two. Distribution - supplying electricity to consumers in an area.

Three. Trading - buying and selling electricity as business.

So, generation does not require licence, but transmission, distribution and trading generally require licence.

Two. Exemption from licence - Section thirteen

Three. Grant of licence - Section fourteen

Deemed licensee

Important deemed/special categories:

Parallel distribution licensing

Four. Procedure for grant of licence - Section fifteen

Five. Conditions of licence - Section sixteen

Six. Licensee not to do certain things - Section seventeen

Seven. Amendment of licence - Section eighteen

Eight. Revocation of licence - Section nineteen

Twelve. Directions to licensees - Section twenty-three

Thirteen. Suspension of distribution licence - Section twenty-four

Important safeguards:

Suspension vs Revocation

Important Case Law Points

Transmission under Electricity Act, two thousand three

Two. Why Transmission is Licensed

Three. Importance of Transmission

Four. Transmission Congestion

Effects of congestion:

Five. Inter-State and Intra-State Transmission

Inter-State Transmission

Intra-State Transmission

Six. Central Transmission Utility - Section Thirty-eight

Seven. State Transmission Utility - Section Thirty-nine

Eight. Role of Central Electricity Authority - Section Thirty-four

Nine. Duties of Transmission Licensee - Section Forty

Ten. Open Access

Eleven. Why Transmission Licensee Should Not Trade

Twelve. Transmission Tariff

Thirteen. Safety in Transmission

Fourteen. Right of Way

Fifteen. Load Despatch Centres

Sixteen. National Load Despatch Centre - Section Twenty-six

Seventeen. Regional Load Despatch Centre - Sections Twenty-seven to Twenty-nine

Nineteen. Scheduling and Despatch

Important Case Laws

Three. Delhi Transco Ltd. v CERC / DERC Context

Four. Simhapuri Energy Case

Five. Indo Rama Synthetics Ltd. v MERC

Distribution under Electricity Act, two thousand and three

Two. Distribution System

Three. Distribution Licensee

Main elements:

Four. Why Distribution is Important

Five. Distribution as the Weakest Link

Six. AT and C Losses

Seven. Distribution is Licensed Activity

Eight. Area of Supply

Nine. Cross-Subsidy

Ten. Parallel Licensing

Twelve. Cherry-Picking

Thirteen. Universal Service Obligation - Section forty-three

Fourteen. Exceptions to Duty to Supply - Section forty-four

Fifteen. Duties of Distribution Licensee - Section forty-two

Sixteen. Open Access - Section forty-two

Seventeen. Wheeling Charges

Eighteen. Cross-Subsidy Surcharge

Nineteen. Additional Surcharge

Twenty. Captive Generation Exception

Twenty-one. Power to Recover Charges - Section forty-five

Twenty-two. Recovery of Expenditure - Section forty-six

Twenty-three. Security Deposit - Section forty-seven

Twenty-four. Electricity Supply Code - Section fifty

Important Case Laws

Two. Noida Power Company Limited versus Paschimanchal Vidyut Vitran Nigam Limited.

Three. BEST versus MERC / Tata Power Case

Four. Sanjay Balvantrai Desai versus Dakshin Gujarat Vij Company Limited.

Five. Sarvottam Ispat Case

Open Access under Electricity Act, twenty oh three

Two. Why Open Access is Important

Three. Simple Example

Four. Types of Open Access

One. Inter-State Open Access

Two. Intra-State Open Access Electricity moves within one State. Regulated by SERC.

One. Long-term access - long duration.

Five. Open Access in Transmission

Six. Open Access in Distribution - Section forty-two

Seven. Open Access for Large Consumers

Eight. Charges Payable in Open Access

A. Transmission Charges

B. Wheeling Charges

C. Cross-Subsidy Surcharge

D. Additional Surcharge

Nine. Captive Generation Exception

Ten. Open Access and Universal Service Obligation

Eleven. Power Market and Power Exchange

Twelve. Scheduling, Deviation and Grid Discipline

Scheduling

Deviation

Overdrawal

Over-injection

Thirteen. UI Charges and Deviation Mechanism

Purpose:

Fourteen. Grid Code

It deals with:

Fifteen. Ancillary Services

If the grid suddenly needs more power, some generators may be directed to increase generation. Purpose:

Sixteen. Section sixty-five: Government Subsidy

Cross-subsidy

Seventeen. Challenges of Open Access

Important Case Laws

Tariff under Electricity Act, two thousand three

Two. Importance of Tariff

Three. Shift from Government Control to Regulatory Control

Four. CERC and SERC Jurisdiction

SERC - Section eighty-six

Five. Section sixty-one: Tariff Principles

Important principles:

Six. Consumer Interest and Cost Recovery

Seven. Multi-Year Tariff

Purpose:

Eight. Cross-Subsidy and Cost of Supply

Nine. Section sixty-two: Tariff Determination

Ten. Tariff Ceiling during Shortage

Purpose:

Eleven. No Undue Preference - Section sixty-two(Three)

Twelve. Article fourteen Link

Thirteen. Tariff Stability

Purpose:

Fourteen. Over-Recovery Prohibited - Section sixty-two(Six)

Simple point:

Fifteen. Section sixty-three: Tariff through Competitive Bidding

Sixteen. Difference between "Determine" and "Adopt"

Seventeen. Cost-Plus Approach

Main components:

Fixed Cost

Examples:

Variable Cost

Examples:

Eighteen. Two-Part Tariff

Nineteen. Transmission Tariff

One. availability;

Twenty. Normative Approach

One. reasonable O and M cost;

Purpose:

Twenty-one. Hybrid Approach

Important Case Laws

Issue: Whether old agreement tariff could continue after Electricity Act, two thousand and three and Commission tariff order.

Two. Central Coalfields Limited versus JSERC

Three. Kerala State Electricity Board versus Principal Sir Syed Institute

Four. Energy Watchdog versus CERC

Consumer Protection under Electricity Act, two thousand and three

Two. Meaning of Consumer - Section two( Fifteen)

Three. Universal Service Obligation - Section forty-three

Important points:

Simple meaning:

Four. Standards of Performance - Section fifty-seven

Five. Tariff Protection - Sections sixty-one and sixty-two

Six. Subsidy - Section sixty-five

Simple point:

Seven. Protection against Disconnection - Section fifty-six

Important points:

Eight. Public Participation

Nine. Consumer Grievance Redressal Forum - Section forty-two(5)

Ten. Electricity Ombudsman - Section forty-two(6)

Eleven. Difference between CGRF/Ombudsman and Commission

Twelve. Remedies under Consumer Protection Act

Fourteen. Metering Rights

Fifteen. Smart Meters

Sixteen. Prosumer Rights

Important Case Laws

Theft and Unauthorised Use of Electricity

Two. Unauthorised Use of Electricity - Section one hundred twenty-six

Simple meaning:

Three. Assessing Officer

Four. Best Judgment Assessment

Six. Period and Rate of Assessment

Seven. Appeal - Section one hundred twenty-seven

Important points:

Purpose of deposit:

Eight. Theft of Electricity - Section one hundred thirty-five

Two elements:

Theft equals dishonest use of electricity to avoid proper payment.

Dishonestly means intention to cause:

Ten. Presumption of Dishonesty

Simple meaning:

Thirteen. Can Section one hundred twenty-six and Section one hundred thirty-five Overlap?

Formula:

Fourteen. Immediate Disconnection in Theft Cases

But:

Fifteen. Search and Seizure Powers

Sixteen. Safeguards during Search

Seventeen. Punishment for Theft - Section one hundred thirty-five

If load does not exceed ten kilowatts

If load exceeds ten kilowatts

Eighteen. Cognizable and Non-Bailable - Section one hundred fifty-one B

Regulatory Commissions and Other Institutions

Two. Need for Regulatory Commissions

Three. Types of Regulatory Commissions

Body Main Area

Four. Legal Status of Commission

Five. Composition and Appointment

Six. Independence of Commission

Seven. Accountability and Transparency

Eight. Advisory Committees

Powers and Functions of Regulatory Commissions

Ten. Mandatory Functions - Sections seventy-nine and eighty-six CERC - Section seventy-nine

SERC - Section eighty-six

Eleven. Advisory Functions

Twelve. Regulation-Making Power

Thirteen. Legislative versus Adjudicatory Function

Fourteen. Adjudicatory Powers

Fifteen. Civil Court-like Powers - Section Ninety-four

Sixteen. Non-Compliance with Commission Orders

Appellate Tribunal for Electricity - APTEL Seventeen. Meaning and Purpose

18. Jurisdiction of APTEL - Section 111

Nineteen. Limitation for Appeal

Twenty-five. Special Nature of Arbitration

Central Electricity Authority - CEA

Twenty-seven. Functions of CEA - Section Seventy-three

Twenty-nine. District Committees

Thirty. Forum of Regulators - Section One hundred sixty-six two

Important Case Laws

Overview

The document explains the licensing framework established by the Electricity Act, 2003, specifically addressing sections related to the necessity for licenses, exemptions, and the procedures for obtaining and managing licenses in the electricity sector. Key points are supported by relevant case law interpretations.

Key Points

1Licensing is necessary for electricity transmission, distribution, and trading but not for generation
2Exemptions from licensing are available for rural electrification under certain conditions
3The Appropriate Commission plays a critical role in granting and monitoring licenses
4Revocation and amendment of licenses can be executed by the Commission under public interest
5The document emphasizes the importance of grid stability and public welfare in licensing decisions

Details

Category: Government and Policy

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