Title: To study ELECTRICITY ACT 2003.

Aim: To study electricity act 2003, energy audit, role of energy manager, energy auditor and
prepare a report.

THE ELECTRICITY ACT, 2003

An Act to consolidate the laws relating to generation, transmission, distribution, trading and
use of electricity and generally for taking measures conducive to development of electricity
industry, promoting competition therein, protecting interest of consumers and supply of
electricity to all areas, rationalization of electricity tariff, ensuring transparent policies
regarding subsidies, promotion of efficient and environmentally benign policies, constitution
of Central Electricity Authority, Regulatory Commissions and establishment of Appellate
Tribunal and for matters connected therewith or incidental thereto.

ACT – 1
PRELIMINARY
Short title, extent and commencement ---
(1) This Act may be called the Electricity Act, 2003.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification,
appoint: Provided that different dates may be appointed for different provisions of this Act
and any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.

ACT – 2
NATIONAL ELECTRICITY POLICY AND PLAN
(National Electricity Policy and Plan) ---
(1) The Central Government shall, from time to time, prepare the National Electricity Policy
and tariff policy, in consultation with the State Governments and the Authority for
development of the power system based on optimal utilisation of resources such as coal,
natural gas, nuclear substances or materials, hydro and renewable sources of energy.
 (2) The Central Government shall publish National Electricity Policy and tariff policy
from time to time.
(3) The Central Government may, from time to time, in consultation with the State
Governments and the Authority, review or revise, the National Electricity Policy and tariff
policy referred to in sub-section (1).

ACT – 3
GENERATION OF ELECTRICITY
Generating company and requirement for setting up of generating station: Any generating
company may establish, operate and maintain a generating station without obtaining a
licence under this Act if it complies with the technical standards relating to connectivity with
the grid referred to in clause (b) of section 73. Section 8. (Hydro-electric generation): --- (1)
Notwithstanding anything contained in section 7, any generating company intending to set-
up a hydrogenerating station shall prepare and submit to the Authority for its concurrence, a
scheme estimated to involve a capital expenditure exceeding such sum, as may be fixed by
the Central Government, from time to time, by notification.

ACT – 4
LICENSING
Authorized persons to transmit, supply, etc., electricity): No person shall
(a) transmit electricity; or (b) distribute electricity; or (c) undertake trading in electricity,
unless he is authorized to do so by a license issued under or is exempt under SECTION 13
(Power to exempt): The Appropriate Commission may, on the recommendations, of the
Appropriate Government, in accordance with the national policy formulated under section 5
and in the public interest, direct, by notification that subject to such conditions and
restrictions, if any, and for such period or periods, as may be specified in the notification, the
provisions of section 12 shall not apply to any local authority, Panchayat Institution, users’
association, co-operative societies, non-governmental organizations, or franchisees:

ACT – 5
TRANSMISSION OF ELECTRICITY
Inter-State, regional and inter-regional transmission: For the purposes of this Part, the Central
Government may, make region wise demarcation of the country, and, from time to time,
make such modifications therein as it may consider necessary for the efficient, economical
and integrated transmission and supply of electricity, and in particular to facilitate voluntary
inter-connections and co-ordination of facilities for the interstate, regional and inter-regional
generation and transmission of electricity.
 ACT – 6
DISTRIBUTION OF ELELCTRICITY
Provisions with respect to distribution licensees
Duties of distribution licensee and open access: --- (1) It shall be the duty of a distribution
licensee to develop and maintain an efficient, co-ordinated and economical distribution
system in his area of supply and to supply electricity in accordance with the provisions
contained in this Act. (2) The State Commission shall introduce open access in such phases
and subject to such conditions, (including the cross subsidies, and other operational
constraints) as may be specified within one year of the appointed date by it and in specifying
the extent of open access in successive phases and in determining the charges for wheeling, it
shall have due regard to all relevant factors including such cross subsidies, and other
operational constraints: Provided that 1[such open access shall be allowed on payment of a
surcharge] in addition to the charges for wheeling as may be determined by the State
Commission: Provided further that such surcharge shall be utilised to meet the requirements
of current level of cross subsidy within the area of supply of the distribution licensee :
Provided also that such surcharge and cross subsidies shall be progressively reduced 2[***]
in the manner as may be specified by the State Commission: Provided also that such
surcharge shall not be leviable in case open access is provided to a person who has
established a captive generating plant for carrying the electricity to the destination of his own
use: 3[Provided also that the State Commission shall, not later than five years from the date
of commencement of the Electricity (Amendment) Act, 2003, by regulations, provide such
open access to all consumers who require a supply of electricity where the maximum power
to be made available at any time exceeds one megawatt.]

ACT – 7
TARIFF
Tariff regulations: The Appropriate Commission shall, subject to the provisions of this Act,
specify the terms and conditions for the determination of tariff, and in doing so, shall
be guided by the following, namely:-
(a) the principles and methodologies specified by the Central Commission for determination
of the tariff applicable to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of electricity are conducted on
commercial principles;
(c) the factors which would encourage competition, efficiency, economical use of the
resources, good performance and optimum investments.

ACT – 8
WORKS
 Works of licensees
Provisions as to opening up of streets, railways, etc: --- (1) A licensee may, from time to time
but subject always to the terms and conditions of his license, within his area of supply or
transmission or when permitted by the terms of his license to lay down or place electric
supply lines without the area of supply, without that area carry out works such as - (a) to
open and break up the soil and pavement of any street, railway or tramway;
(b) to open and break up any sewer, drain or tunnel in or under any street, railway or
tramway; (c) to alter the position of any line or works or pipes, other than a main sewer
pipe; (d) to lay down and place electric lines, electrical plant and other works; (e) to repair,
alter or remove the same; (f) to do all other acts necessary for transmission or supply of
electricity.

ACT – 9
CENTRAL ELECTRICITY AUTHORITY
Constitution and functions of Authority
Constitution, etc., of Central Electricity Authority: --- (1) There shall be a body to be called
the Central Electricity Authority to exercise such functions and perform such duties as are
assigned to it under this Act.
(2) The Central Electricity Authority, established under section 3 of the Electricity
(Supply) Act, 1948 and functioning as such immediately before the appointed date, shall
be the Central Electricity Authority for the purposes of this Act and the Chairperson ,
Members, Secretary and other officers and employees thereof shall be deemed to have
been appointed under this Act and they shall continue to hold office on the same terms and
conditions on which they were appointed under the Electricity (Supply) Act, 1948.

ACT – 10
REGULATORY COMMISSIONS Constitution,
powers and functions of Central Commission
Constitution of Central Commission: --- There shall be a Commission to be known as the
Central Electricity Regulatory Commission to exercise the powers conferred on, and
discharge the functions assigned to it under this Act.

ACT – 11
APPELLATE TRIBUNAL FOR ELECTIRICITY
 Establishment of Appellate Tribunal: The Central Government shall, by notification, establish
an Appellate Tribunal to be known as the Appellate Tribunal for Electricity to hear appeals
against the orders of the adjudicating officer or the Appropriate Commission under this Act.
Appeal to Appellate Tribunal: --- (1) Any person aggrieved by an order made by an
adjudicating officer under this Act (except under section 127) or an order made by the
Appropriate Commission under this Act may prefer an appeal to the Appellate Tribunal for
Electricity.

ACT – 12
INVESTIGATION AND ENFORCEMENT
Assessment: --- (1) If on an inspection of any place or premises or after inspection of the
equipments, gadgets, machines, devices found connected or used, or after inspection of
records maintained by any person, the assessing officer comes to the conclusion that such
person is indulging in unauthorized use of electricity, he shall provisionally assess to the best
of his judgement the electricity charges payable by such person or by any other person
benefited by such use.
(2) The order of provisional assessment shall be served upon the person in occupation or
possession or in charge of the place or premises in such manner as may be prescribed.

ACT – 13
REORGANISATION OF BOARD
Vesting of property of Board in State Government: --- With effect from the date on which a
transfer scheme, prepared by the State Government to give effect to the objects and purposes
of this Act, is published or such further date as may be stipulated by the State Government
(hereafter in this Part referred to as the effective date), any property, interest in property,
rights and liabilities which immediately before the effective date belonged to the State
Electricity Board (hereinafter referred to as the Board) shall vest in the State Government on
such terms as may be agreed between the State Government and the Board.

ACT – 14
OFFENCES AND PENALTIES
Theft of Electricity: ---) Whoever, dishonestly, --
 (a) taps, makes or causes to be made any connection with overhead, underground or under
water lines or cables, or service wires, or service facilities of a licensee or supplier as the
case may be; or
(b) tampers a meter, installs or uses a tampered meter, current reversing transformer, loop
connection or any other device or method which interferes with accurate or proper
registration, calibration or metering of electric current or otherwise results in a manner
whereby electricity is stolen or wasted; or
(c) damages or destroys an electric meter, apparatus, equipment, or wire or causes or
allows any of them to be so damaged or destroyed as to interfere with the proper or
accurate metering of electricity,
(d) uses electricity through a tampered meter; or
(e) uses electricity for the purpose other than for which the usage of electricity was
authorised,

ACT – 15
SPECAIL COURTS
Constitution of Special Courts: ---
(1) The State Government may, for the purposes of providing speedy trial of offences
referred to in 1[sections 135 to 140 and section 150], by notification in the Official Gazette,
constitute as many Special Courts as may be necessary for such area or areas, as may be
specified in the notification.
(2) A Special Court shall consist of a single Judge who shall be appointed by the
State Government with the concurrence of the High Court.

ACT – 16
DISPUTE RESOLUTION
Arbitration
Arbitration: Where any matter is, by or under this Act, directed to be determined by
arbitration, the matter shall, unless it is otherwise expressly provided in the licence of a
licensee, be determined by such person or persons as the Appropriate Commission may
nominate in that behalf on the application of either party; but in all other respects the
arbitration shall be subject to the provisions of the Arbitration and Conciliation Act, 1996.

ACT – 17
 PROVISIONS
Protective Clauses
Protection of railways, highways, airports and canals, docks, wharfs and piers: No person
shall, in the generation, transmission, distribution, supply or use of electricity, in any way
injure any railway, highway, airports, tramway, canal or water-way or any dock, wharf or pier
vested in or controlled by a local authority, or obstruct or interfere with the traffic on any
railway, airway, tramway, canal or water-way.

ACT – 18
MISCELLANEOUS
Coordination Forum: ---
(1) The Central Government shall constitute a coordination forum consisting of the
Chairperson of the Central Commission and Members thereof, the Chairperson of the
Authority, representatives of generating companies and transmission licensees engaged in
inter-State transmission of electricity for smooth and coordinated development of the
power system in the country.
(2) The Central Government shall also constitute a forum of regulators consisting of the
Chairperson of the Central Commission and Chairpersons of the State Commissions.

THE SCHEDULE
ENACTMENTS: The schedule to this Act mentions the State Reforms Acts. Originally 8
enactments were incorporated:
1. The Orissa Electricity Reform Act, 1995 (Orissa Act No. 2 of 1996)
2. The Haryana Electricity Reform Act, 1997 (Haryana Act No. 10 of 1998)
3. The Andhra Pradesh Electricity Reform Act, 1998 (Andhra Pradesh Act No. 30 of 1998)
4. The Uttar Pradesh Electricity Reform Act, 1999 (Uttar Pradesh Act No. 24 of 1999)
5. The Karnataka Electricity Reform Act, 1999 (Karnataka Act No. 25 of 1999)
6. The Rajasthan Electricity Reform Act, 1999 (Rajasthan Act No. 23 of 1999)
7. The Delhi Electricity Reforms Act, 2000 (Delhi Act No.2 of 2001) 8. The Madhya
Pradesh Vidyut Sudhar Adhiniyam, 2000 (Madhya Pradesh Act No. 4 of 2001)
CONCLUSION: From this study we have got the chance to learn and know about the
electricity act.