 Uniform National policies,viz.

*Privatization of Power Sector

*Open Access to Transmission and
Distribution
*Reducing transmission/distribution losses
 Electricity Act 2003
 Central and State Regulatory Commissions
 Major Milestones in Power Sector Reforms
Electricity Act 2003 replaces the following laws and harmonizes
the provisions of these through a new comprehensive legislation
meeting the reform related issues like trading, competition etc.

Act Provisions
Indian Electricity Provided basic framework for the industry. It
Act 1910 envisaged growth through private licensees and
provided for licensees to supply a specified
area.
Electricity (Supply) Mandated the creation of State Electricity
Act 1948 Boards (SEBs) with the responsibility of
managing electricity supply in the State.
Electricity Created the Central Regulatory Commission
Regulatory and gave the legal framework for creating State
Commissions Act Regulatory Commissions.
1998
 Generation de-licensed except for hydro
projects
 Distribution licensees free to undertake
generation and vice versa
 For rural areas, decentralised
management of distribution thro’
panchayat
 For receiving supplies directly from
generation company, only transmission
and wheeling charges with surcharge will
be regulated and not the power price
 Provision of independent legal system
 The Electricity Act 2003
(E-Act 2003) is a 100 odd page
document with 185 sections
covered in 18 parts.
 Main Features - Generation

Electricity Act 2003 replaces the following laws and

harmonizes the provisions of these through a new
comprehensive legislation meeting the reform related
issues like trading, competition etc.
• Generation delicensed: Thermal generation does not
need clearance from CEA. Only large or inter-state
Hydel projects need this.

• Setting up Captive generation does not need

permission. Captive generation can be set up by a
group or society to meet their needs. The captive
plants can be located off-site (far from the
consumption point).
 Main Features - Transmission

• Transmission utility at the central level will

continue to hold responsibility of co-
ordinating planning of the transmission
network. These utilities or the State
governments would look after load dispatch
(scheduling of plants, maintenance etc).

• Private companies can build Transmission

lines for captive use or for common use.
 Main Features – Open Access

• Open Access: Any generating station will get access to the

transmission system at a fee, subject to capacity
availability. They will have to pay a fee to the transmission
utility (called wheeling charge) and charges for load
dispatch centre.

• Bulk consumers including DISCOMS can take advantage

of Open access by purchasing the wheeled power. Large
consumers will have to pay a surcharge to cover cross
subsidy, except in case of the captive generating stations.

• The State Regulatory Commission may permit Open

access in distribution in phases and can levy a surcharge
on users buying power through open access. This will be
utilised to cover cross subsidy in that area.
 Main Features – Distribution

• Distribution licensees are free to undertake generation

and generation companies are free to undertake
distribution license.

• The commission can allow multiple licenses in the

area of a distribution licensee .

• For rural and remote areas, stand alone systems for

generation and distribution are allowed.

• Distribution managed through Panchayats, User

associations, Co-operatives or Franchises would also
be permitted without needing license (in state
government notified areas).
Vertically Integrated SEBs

Generation

Transmission
TRANSCO
(Grid)

Local

System

Final
Customers
(CONSUMERS
 Unbundled Structure OF SEB’s

Generation Genco Genco IPP

Transmission Transco JVs, Pvt

Distribution DISCOM DISCOM DISCOM

consumer consumer consumer

 Main Features – Regulations

• State governments can un-bundle SEBs and create

companies. At the minimum the transmission activity
needs to be separated from SEB.
• All states should have Regulatory Commissions.
• Regulatory Commissions will determine tariff, regulate
electricity purchase, issue license, and advise
government
• The Regulatory Commissions have tremendous authority
over licensees – including deciding their standards of
performance, consumer grievance forums, etc. In case of
non-performance or indiscipline by licensees, the RC can
fine utilities, officers and even force company to sell the
assets / revoke the license. All proceedings before the
commission shall be deemed to be judicial proceedings
and the commission deemed to be a civil court.
• An Appellate tribunal will be created at the Centre for
disposal of appeals against decisions of CERC and
SERCs.
 Main Features – Power Trading
• Power Trading is being recognised as an activity that can be
taken up after authorisation of Regulatory Commissions. The
Regulatory Commissions would issue licence and fix ceilings
on trading margins. Distribution licensees and state
governments do not require license to carry out trading.
• After Open access is allowed, consumer can enter into direct
commercial relationship with a generating company or Trader.
In such a case, the price of power will not be regulated, but the
transmission charges (called wheeling charges) and surcharge
would be.
• Power Trading Corporation (PTC) was set up as a central
corporation in 1999 to promote inter-state trading. Several
companies have approached CERC for license. This includes
Reliance Energy, Adani Exports Ltd, Essar, Koyela Energy,
Tata Power and Amalgamated Transpower.
 Main Features – Grievance Redressal
and Standards of Performance

• Every distribution licensee is to establish a forum for

redressal of consumer grievances as per the
guidelines of re respective Regulatory Commission.

• The Regulatory Commission is to set up a redressal

authority one level higher in the form of an
‘Ombudsman’.

• Distribution licensees have the duty to provide power

supply to any consumer within one month of receipt of
an application, subject to some clauses. Regulatory
Commission to specify standards of performance for
distribution licensee.
 Requirements
RESOLUTION OF DISPUTED BILLS

The “Supply Code” Regulations require:

Aggrieved party to lodge complaint before designated officer.

To pay under protest, within due date, the lower of:
Average charge of electricity paid by the consumer
during the preceding 6 months
Sum claimed
If disputed bill is found to be erroneous, revised bill to be
furnished to consumer. Refund, if applicable, to be adjusted in
subsequent bill with interest.
If disputed bill is found to be correct, consumer to be
intimated. He has to pay balance amount, if any, with
applicable surcharge and interest within 7 days of receipt.

This will require Regional Offices to be able to generate such

average bills/ revised bills and changes in payment matching/
adjustment logic.
 Requirements

The “Standards of Performance” Regulations require:

 Compensation to be paid to consumers if specified

standards in various service areas (mostly supply-related and a
few commercial) are not met.
This implies that date and time of complaints has to be
noted by the Utility
A CRM system has to be in place to track complaints and
follow-up action, across Departments, with MIS reports

 Report in specified format to be submitted every October

and April for preceding 6 months.
 Requirements
SERVICE AREAS
Area NEW CONNECTIONS Time Allowed
1 New connections where 30 days
distribution mains already
exists.
2 New connections where LT: 45 days for <100 mtrs
extension of distribution & 90 days for >100mtrs
mains is required. HV & EHV: 180 days COMPENSATION
3 New connections where LV/MV : 45 days FOR DELAY
commissioning of a new HV : 60 days
substation is required. EHV : 90 days Year Rs/Day
(Time
Area EXTENSION OF LOAD
slab)
1 New connections where 30 days
1 50
distribution mains
already exists. 2 250
2 New connections where LT& MV : 90 days 3 500
extension of HV & EHV: 180 days
distribution mains is
required.
3 New connections where Distn S/S : 90 days
commissioning of new 33/11 KV S/S : 150 days
plant in an existing 132/33 KV S/S : 270 days
substation is required.
 Requirements
SERVICE AREAS

Area UNPLANNED Year 1 Year 2 Year 3

INTERRUPTIONS
5a Failure of Licensee’s fuse 4 hrs 4 hrs 3 hrs
5b Snapping of wires (LT) 6 hrs 4 hrs 4 hrs
5c Felling of trees on OH lines 12 hrs 10 hrs 8 hrs
w/o breaking/ uprooting of COMPENSATION
poles
FOR DELAY
5d Breakdown due to s.c. of LT 8 hrs 4 hrs 3hrs
lines Year Rs/slab
5e Breakdown of 11 kV line (OH) 8 hrs 6 hrs 4 hrs (Time
slab)
5f HT UG cable faults Temp restoration: 24 hrs
Rectification: 10 days 1 50
5g Failure of distribution 72 hrs 48 hrs 24 2 250
transformers hrs 3 500
5h Breakdown of LT line for any 10 hrs 8 hrs 6 hrs
other reason
5i Failure of service main 24 hrs 16 hrs 12
(UG/OH) hrs
 Requirements
SERVICE AREAS

Area VOLTAGE RELATED Year 1 Year 2 Year 3

6a Voltage complaints 15 days if problem is local

6 Months if correction
requires augmentation of
the dist system.
6b Voltage fluctuations 8 days 6 days 4 days COMPENSATION
FOR DELAY

Year Rs/slab
(Time/
slab)
1 50
2 250
3 500
 Requirements
SERVICE AREAS

Area METERING & METERING Year 1 Year 2 Year 3

EQUIPMENT COMPLAINTS
7a Replacement of burnt-out / 13 days 10 days 7 days
faulty meters where supply is
not affected
7b Replacement of burnt-out / 46 hrs 36 hrs 24 hrs
COMPENSATION
faulty meters where supply is
affected FOR DELAY

Year Rs/slab
7c Accidental breakage of seals 48 hrs 36 hrs 24 hrs
where no tampering is
suspected 1 50
2 250
If replacement of meter is 15 days 10 days 7 days 3 500
required
 Requirements
SERVICE AREAS

Area MODIFICATIONS TO THE Year 1 Year 2 Year 3

EXISTING CONNECTION
10a Transfer of installation where 20 days 15 days 10 days
shifting is not involved
10b Shifting of meter/ meter board 20 days 15 days 10 days
COMPENSATION
10c Conversion from one tariff to 20 days 15 days 10 days FOR DELAY
another
10d Removal of meter on request 15 days 10 days 7 days Year Rs/slab
from consumer
1 50
10e Reduction of load/ surrender 20 days 15 days 10 days
of power supply 2 250
3 500