Electricity Act -2003

Earlier in India, the electricity supply industry was governed and regulated by the Indian Electricity Act 1910, Electricity Act 1948 and the Electricity Regulatory Commission Act 1998. These three Acts were not able to cater to the changing times of industrialization, globalization, the economic needs of the increasing population coupled with the power sector reforms across various states and therefore, Parliament passed the Electricity Act in the year 2003.


Electricity Act, 2003 (Purpose)

The Electricity Act, 2003 was enacted to take care of the needs of the power sector in the areas of generation, transmission, distribution and trading of electricity. This Act applies to the whole Indian territory except Jammu & Kashmir. It was enacted so as to supplement the development of the electricity sector while promoting competition in the sector. It aims to protect the consumers and rationalizing the electricity tariffs.


Significant features of the Act

  • Provision for private Transmission licenses;
  • No license for generation of electricity (except hydro-projects);
  • Distribution licensees can undertake generation;
  • Transmission utility at both central and state level;
  • Establishment of Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commission (SERC), Central Advisory Committee (CAC) & State Advisory Committee (SAC);
  • Establishment of fund at both central and state level;
  • Captive generation is permitted by a group of people to meet their own needs;
  • Open access may be permitted by the SERC in distribution in phases;
  • Introduction of Multi-Year Tariffs;
  • Direct nexus between the consumer and the generating company or a trader;
  • Provision for transfer scheme;
  • Metering of electricity is mandatory;
  • Caps put on trading margins;
  • Generation and distribution to be allowed in rural and remote areas;
  • Establishment of Appellate Tribunal to adjudicate upon the issues faced by the consumers;
  • Penalties and punishments have been prescribed for offences including but not limited to the theft of electricity, stolen property, damaging work, etc.;
  • Jurisdiction of Civil court is excluded for speedy disposal of electricity disputes;
  • National Electricity Policy and Tariff Policy to be tabled out by the Central Government;
  • Establishment of special courts for speedy trials;
  • There is also provision for arbitration to avoid consumption of time and resources.


Landmark Judgments

Tata Power Company Vs Maharashtra Electricity Regulatory Commission 2009 ELR (SC) 246

Brihanmumbai Electric Supply & Transport Undertaking (BEST) v. Mahrashtra Electricity Regulatory Commission (MERC) & Ors. CIVIL APPEAL NO.4223 OF 2012

U.P Power Corporation Ltd. & Others v. Anis Ahmad (2013) 8 SCC 491

T.N. Generation & Distribution Corporation v. PNP Power Gen Co. CIVIL APPEAL NO. 4126 OF 2013

M/s. Sesa Sterlite Ltd Vs. Orissa Electricity Regulatory Commission & Ors. CIVIL APPEAL NO. 5479 of 2013

Hindustan Zinc vs Rajasthan Electricity Regulatory Commission CIVIL APPEAL NO.4417 OF 2015


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