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:
.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;
● 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.
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