Electricity Law

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Electricity Law

Electricity Law

The Electricity Act, 2003 is an Act of the Parliament of India enacted to transform the power sector in India. The act covers major issues involving generation, distribution, transmission and trading in power

Role of Central Electricity Authority

The role of CEA is limited to policy recommendations, monitoring electricity sector performance, advising the Ministry of power on technical issues, data management/dissemination of the power sector, etc.

Preparation of technical standards for construction of electrical plants, electric lines and connectivity to the grid is the responsibility of CEA as per section 73 (b) of the Electricity Act, 2003. However, as per section 7 of this Act, a generating company may establish, operate and maintain a generating station if it complies with the technical standards only relating to connectivity to the grid as given in clause (b) of section 73. This implies that generating stations need not follow compulsory the CEA technical standards specified for construction of electrical plants and electric lines. Similarly, transmission / distribution licensees need not implement compulsory the standards for construction of electric lines except the Grid Code/ Grid Standards for the operation and maintenance of transmission lines specified by CEA under clause 73 (d) of this Act. Many times, these CEA standards are conservative compromising optimum design features /cost/ utility and also do not give full clarity in selection of the system / sub system capabilities of electrical plants and electric line.

Government policy and legislative framework for the Electricity Sector

We have defined framework in following manner:-

  • Recognizing the Central Electricity Authority (CEA) as the technical advisory body to the Government of India (GoI) and the electricity regulatory commissions; and
  • Promoting renewable energy projects.
  • Constitutional framework: The seventh schedule of the Constitution of India sets out the subjects on which Parliament and the state legislatures can frame legislation, and demarcates such subjects in three lists, namely Union List, State List and the Concurrent List. While Parliament and the state legislatures legislate exclusively upon subjects mentioned in the Union List and the State List respectively, the subjects mentioned in the Concurrent List can be legislated upon by both. However, in case of a conflict between the laws made by the state legislatures and Parliament on the same subject matter under the Concurrent List, the state legislation will be void to the extent it is inconsistent with legislation made by Parliament. Electricity is a subject mentioned in the Concurrent List.
  • Legislative framework: The Electricity Act 2003 (the Electricity Act) is the parent legislation governing the electricity sector in India (other than for nuclear energy, which is governed by the Atomic Energy Act 1962). The Electricity Act consolidated various laws governing the electricity sector in India and introduced key reforms such as:-
  • Restructuring of state electricity boards into separate entities governing generation, transmission and distribution activities;
  • De-licensing most generation activities, recognising power trading as a distinct activity and promoting captive generation;
  • Introducing the requirement for providing non-discriminatory open access;
  • Constituting electricity regulatory commissions at state and central levels (ie, state electricity regulatory commissions (SERCs) and the Central Electricity Regulatory Commission (CERC) respectively), and an appellate tribunal (ie, the Appellate Tribunal for Electricity (APTEL), inter alia) to hear appeals against decisions of the SERCs and CERC;

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