electricity act 2003

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Electricity Act 2003

By

Er NC Goyal

Chief Engineer PSEB (Retd)

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Introduction:• Under the Constitution of India, electricity is

a 'concurrent' subject.• Hence, the Central as well as the State

governments have authority to enact legislation in regard to the power sector.

• The Central Government generally provides the policy framework and the State governments focus on specific issues.

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Following Acts had been enacted by the Central Govt:

• Electricity Act 1887• The Indian Electricity Act, 1910• The Electricity (Supply) Act, 1948• The Electricity Regulatory Commissions Act,

1998• All the above mentioned Acts have been replaced

by The Electricity Act, 2003.• The Act has been brought into force with effect

from 10th of June, 2003.

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Power is the critical infrastructure on which

economic activity is heavily dependent.

Only 55% households in India have access to electricity.

Even where it is available, the quality and reliability are rather poor.

In spite of this, the power tariffs in India are among the highest in the world.

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To meet the essential requirement for becoming internationally competitive and for achieving the vision of 8% GDP growth per annum, it is important that electricity of good quality is provided at reasonable rates.

The financial health of SEBs has been deteriorating.

There is a big gap between unit cost of supply and revenue.

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The annual losses have reached unsustainable levels of over Rs.33,000 crores.

In the last two Plan periods, barely half of the capacity addition planned was achieved.

The power shortages across the country is a matter of concern and the situation would have been worse but for the slowdown in manufacturing sector.

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Govt. has set the goal of electrifying all our villages by 2007 and all our households by 2012.

Access is yet to be provided to about 80,000 villages.

Enormous generating capacity need to be created to outgrow the situation of energy and make the country free of power cuts with some spare generating capacity so that system is also reliable.

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More importantly, the sector needs to be made financially healthy.

It should be able to attract funds from the capital markets.

It is in this context that the Electricity Act 2003 seeks to bring qualitative transformation of the electricity sector through a new paradigm.

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The objectives of the Act “To consolidate the laws relating to generation,

transmission, distribution, trading and use 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 for matters

connected therewith or incidental thereto.”

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• The Act strikes a balance which takes into account the complex ground realities of the Power sector in India with it’s intractable problems.

• The Act is divided into 18 Parts and salient features are as follows:

• The Central Government to prepare a ‘National Electricity Policy’ in consultation with State Govts. (Section 3)

• Thrust to complete the rural electrification and provide for management of rural distribution by Panchayats, Cooperative Societies, NGOs etc. (Section 4,5,6)

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• Provision for license free generation and distribution

in the rural areas. (Section7,14)

• Generation being de licensed and captive generation

being freely permitted. Hydro projects would,

however, need clearance from the CEA. (Section

7,8,9)

• Transmission Utility at the Central as well as State

level, to be a Government company- with

responsibility for planned and coordinated

development of transmission network.

(Section38,39)

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• Provision for private licensees in transmission and entry in distribution through an independent network. (Section 14)

• Open access in transmission from the outset. (Section 38-40)

• Open access in distribution to be introduced in phases with surcharge for current level of cross subsidy to be gradually phased out along with cross subsidies and obligation to supply. SERCs to frame regulations within one year regarding phasing of open access. (Section 42)

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• Distribution licensees would be free to undertake generation and generating companies would be free to take up distribution businesses. (Section7,12)

• The State Regulatory Commission is a mandatory requirement. (Section 82)

• Provision for subsidy through budget.(Section65)• Trading, a distinct activity is being recognized

with the safeguard of the Regulatory Commissions being authorized to fix ceilings on trading margins, if necessary.(Section 12,79,86)

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• Provision for reorganization or continuance of SEBs. (Section 131,172)

• Metering of all electricity supplied made mandatory.(Section 55)

• An Appellate Tribunal to hear appeals against the decision of the CERC and SERCs. (Section 111)

• Provisions relating to theft of electricity made more stringent. (Section 135-150)

• Provisions safeguarding consumer interests. (Section 57-59,166) Ombudsman scheme (Section 42) for consumers grievance redressal.

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The Electricity Act 2003

•Part 1 :Preliminary(Sections 1-2)

•Part 2 :National Power Policy (Sections 3-6)

•Part 3 :Generation(Sections 7-11)

•Part 4 :Licensing(Sections 12-24)

•Part 5 :Transmission (Sections 25-41)

•Part 6 :Distribution (Sections 42-60)

•Part 7 :Tariffs (Sections 61-66)

•Part 8 :Works (Sections 67-69)

•Part 9 :Central Electricity Authority (Sec.70-75)

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The Electricity Act 2003

•Part 10 :Regulatory Commissions (Sec.76-109)

•Part 11 :Appellant Tribunal (Sections 110-125)

•Part 12: Investigation and Enforcement (Sec.126-130)

•Part 13 :Reorganisation of Board (Sections 131-134)

•Part 14; Offences and Penalties (Section 135 -152)

•Part 15 :Special Courts (Sections153 - 157)

•Part 16 :Dispute Resolution (Sections 158)

•Part 17 :Other provisions (Sections 159- 165)

•Part 18 :Miscellaneous (Sections 166-185)

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The Act - New Model for Power Sector

•The Act has introduced major policy shift and has far reaching implications for the power generation, transmission and distribution scenario.•The Act supersedes all the previous electricity acts.

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Indian Electricity Act 2003(Sec.-3: National Power Policy)

• National Power Policy notified on February 12, 2005 and envisages:• Minimum lifeline consumption of 1 unit per household per day as a National Policy by the year 2012.•Per capita availability of electricity to be increased to over 1000 units by 2012.

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Indian Electricity Act 2003National Policy/Plan

•Goal of adding new generation capacity of more than 78500 MW during 11th Plan periods to have per capita availability of over 1000 units of electricity per year.

•Section 3 (4) :National Power Plan will be prepared by CEA as per power policy

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Indian Electricity Act 2003Section 4-6:Distributed Generation56% of rural houses still to be electrifiedDecentralized distributed generation based either on conventional or renewable sources of electricity generation, whichever is more suitable and economical. Non-conventional sources of energy could be utilized, even where grid connectivity exists provided it is found to be cost effective.

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Indian Electricity Act 2003Section 4 National Rural Electrification PolicyMini-grids for isolated communities. These systems may integrate wind, solar energy and, in some cases, diesel generators and/or storage systems to more than a village or cooperative. Local ownership is important for project sustainability; and provides a link between the project and the community. It increases the communication between the villagers and project developers and allows a project to be seen as more of a local response to local needs than a government-imposed, top-down development.

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Indian Electricity Act 2003Section 5- provides:

Management of local distribution in rural areas through:Panchayat Institutions,Users’ associations, Cooperative societies, Non-Governmental organizations or Franchisees.

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Example:Cumulative Additional Revenue Mobilized under GVP Franchise

3.727399

8.974223

17.655815

33.974931

0

5

10

15

20

25

30

35

40

April.04 May.04 June.04 July.04

Millio

ns

Month

Millio

n R

s.

Series1

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Indian Electricity Act 2003Sections 131-134: Unbundling

• To promote competition• For growth of open access and • To promote renovation and modernisation of network, --- unbundling of generation, transmission and distribution in power sector is urgent as envisaged

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Existing market structure

GENCO GENCO

DISCOMDISCOM

CUSTOMERCUSTOMERCUSTOMER

TRADERS

TRANSMISSION

DISCOM

TR

AN

SM

ISS

ION

GENCO

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Proposed market structure in Act 2003

IPP

CustomerCustomer

Distribution

Distribution

Transmission

Transmission

Generation

Generation

CustomerCustomer

Open Access in

Transmission

Open Access in

Transmission

TRADERSTRADERS

Open Access

in Distribution

TRADERSTRADERS

DISCOMDISCOMDISCOMDISCOMDISCOMDISCOM

GENCOGENCOGENCOGENCO

Customer Customer

IPP

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Indian Electricity Act 2003•The Act allows distribution to be separated from Transmission and generation• Distribution circles limited even up to the level of substations could be given to private parties,thuseffectively doing away with the requirement of largeutilities and business parties.

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Example:Torrent Power Franchisee Bhiwandi Circle(MSEB)

1.

Torrent Power has taken recently over 10 year franchisee from Maharashtra State Electrcity Board, Bhiwandi Circle.

It is rural circle

Estimated annual revenue is Rs.500 crores with 6000 MW of power.

T & D losses are 45% due to large theft

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Example:Torrent Power Franchisee Bhiwandi Circle(MSEB)

Out 9 lakh power loom in the country, 6 lakhs are in the Bhiwandi circle

Defaulting amount Rs.800 crores ,out of which Rs.250 crores from power loom consumers

Torrent Power has promised to bring losses to 14%.

Collection efficiency from 62% to 98%

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The Act will permit free entry into generation there by delicensing generation. However, hydroelectric projects will require usual clearances from the Central Electricity Authority (CEA), besides those from environment ministry and the state government. Any generating company may establish,operate and maintain a generating station and have grid connectivity, if it complies the technical standards, laid by CEA.

Indian Electricity Act 2003Section 7-11 -Generation

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Captive plants will be freely permitted henceforth,not only for captive use in the promoter’s own plants but also for the use of groups of industries, 25000 MW captive power is available in India out of above 1000 MW is available for supply to grid or open access

Indian Electricity Act 2003Section 9 -Captive Generation

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Indian Electricity Act 2003Section 12-24:Licensing

Transmission and Distribution•The Act permits multiple licenses in parallel transmission and distribution lines; •Thereby making a provision for private transmission licenses and in the process provides a fillip to power trading.•Exemptions may be given to local rural management

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Indian Electricity Act 2003Trading License

•Sec 66- Power Exchange has started working from July 2007.

•Sec 12(c)- Indian power market trading volume so far is about 3% of the total generation in the country. •22 players have been granted licence to trade in electricity by CERC. •Five have started doing business. •It is important that central government assign 10% of unallocated power to power exchange.

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Indian Electricity Act 2003Section 3- National Tariff Policy

•Government of India has notified the National Tariff policy on January 6, 2006.• It requires cross-subsidies to be brought down to a maximum of +/-20% of the average cost of supply . •As per National Electricity Policy, consumers below poverty line who consume below a specified level,

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Indian Electricity Act 2003Section 3-National Tariff Policy

say 30 units per month, may receive a special support through cross subsidy. •Tariffs for such designated group of consumers will be at least 50% of the average cost of supply. This provision will be re-examined after five years.

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Indian Electricity Act 2003 Section 61- Multi-Year TariffMulti-Year Tariff (MYT) framework is an important structural incentive to minimize risks for utilities and consumers, promote efficiency and rapid reduction of system losses.Conducive business environment in terms of adequate returns and facilitating funding and attracting investments in distribution.The framework should feature a five-year control period.

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Indian Electricity Act 2003 Tariff Policy for Clean Electricity Tariff fixation for all electricity projects (generation, transmission and distribution) that result in lower Green House Gas (GHG) emissions than the relevant base line should take into account the benefits obtained from the Clean Development Mechanism (CDM) into consideration, in a manner so as to provide adequate incentive to the project developers

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Section 65 –subsidised tariff shall be arrived at thereafter considering the subsidy by the State for the respective categories of consumers. At present annual budget subsidy is about Rs.39000 crores in India

Indian Electricity Act 2003 State Government budget Subsidy

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Indian Electricity Act 2003 Cross-subsidy

For achieving the objective that the tariff progressively reflects the cost of supply of electricity, the SERC would notify roadmap within six months with a target that latest by the end of year 2010-2011 tariffs are within ± 20 % of the average cost of supply.For example if the average cost of service is Rs 3 per unit, at the end of year 2010-2011 the tariff for the cross subsidised categories should not be lower than Rs 2.40 per unit and that for any of the cross-subsidising categories should not go beyond Rs 3.60 per unit.

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Indian Electricity Act 2003 Transmission pricing

The National Tariff Policy mandates that the national tariff framework implemented should be sensitive to distance, direction and related to quantum of power flow

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Indian Electricity Act 2003 Open AccessOpen Access

• Section 38 & 39: Providing non-discriminatory Open Access in transmission is one of the functions of Central and State Transmission Utilities.

- To any generating Company and licensee on payment of transmission charges.

- To any consumer on payment of transmission charges and surcharge there on as fixed by the Commission.

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Section 42(2) mandates the state regulatory commissions to introduce open access.

This promotes the competition

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Section 42 :

• State Commission shall within one year from the appointed date shall notify Open Access in phases subject to conditions specified by the Commission.

• Non-discriminatory Open Access - Any consumer on payment of wheeling charges, surcharge and additional surcharge as fixed by the Commission

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Section 3:

• Electricity (Amendment) Act, 2003 provides that Commission shall not later than five years from the date of commencement of Electricity (Amendment) Act 2003 by regulations shall provide such Open Access to all consumers who require supply of electricity where the maximum power to be made available at any time

exceeds 1 MW.

• Any dispute regarding the availability of transmission facility shall be adjudicated upon by the appropriate Commission.

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Section 9:

• Captive Power Plants will have mandatory Open Access subject to the availability of network capacity.

Section 86:

• Where Open Access has been permitted the Commission U/S 42 shall determine only wheeling charges and surcharges thereon.

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Open Access ConsumersOpen Access Consumers

• There are over 500 consumers in Andhra Pradesh alone who are availing open access.

• In other states , it is more than 1000

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More Open Access

From April 2007, consumers are eligible to choose their suppliers:

•Above 5MW in UP,

•Above 3 MW in Karnataka

•Above 1.5 MVA in Rajasthan and

•Above 1MVA in Maharashtra

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Role of Regulator shall be very crucial as happens in any free and open power market structure. The role will be important especially for promoting competition, fixing reasonable charges for distribution, transmission,generating tariffs, fixing wheeling and cross-subsidy charges,and in protecting the consumers from the rising prices of electricity,more so in time of shortages.

Indian Electricity Act 2003 Sec. 70-109:Regulatory Commission

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The Regulatory commission should assure consumer protection through continuing enforcement of :• the service quality and performance standards. • It can use regulatory tools to get management to achieve the desired results. – Assist, Encourage, Reward, Punish (fine or penalties etc)

Regulatory Commission

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Regulatory approach has to vary depending upon the local conditions.

Regulatory Commission must impose disciplines to ensure that:

The networks are efficiently planned and constructed; • the networks are efficiently operated and

maintained; • to provide an assurance of adequate return

for investors.

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• The regulator must determine most appropriate balance (debt-equity) that will allow the utility to access the capital markets while at the same time making certain that the consumer is getting value for what he or she is paying.

• Regulator must see: service quality, least cost planning, maintaining public trust.

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Framework for Revenue Requirements and Costs

The SERC shall undertake independent assessment of baseline data for various parameters for every distribution circle of the licensee

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Indian Electricity Act 2003 Sections(76 – 109) Regulatory Commissions

•Many of our key electricity services are covered by Guaranteed Standards•These are standards of service set by the Regulator.

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Indian Electricity Act 2003 Guaranteed Standard Of Performance Every state electricity regulatory commission

needs to issue notification so that agreed standard of service is provided to the consumer.

Any deviation from the standard will attract penalties and some compensation to the consumer within time limit specified.

• Time response to consumer for electricity complaint

• Maximum time for restoring power supply after the fault for different categories of consumers

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Indian Electricity Act 2003 Guaranteed Standard Of Performance• Time schedule for providing meter and

power supply for new connection• Advance notice of supply interruption.• Responding to meter/billing problems • Investigation of voltage problems• Making and keeping appointments

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Example:Guaranteed Service Standards(APRC)

Restoration of Supply: a) Normal Fuse off Calls Within 4 working Hrs a) Rs.50 for each day of default b) Line Break downs/Cable breakdowns- Within 6 Hrs b) Rs.50 for each day of default c) Under ground cable breakdowns Within 12 Hrs c ) Rs.50 for each day of default d) Replacement of failed DTRs Within 24 Hrs d) Rs.100 for each day of default Voltage fluctuations: a) No expansion/ enhancement of network is involved Within 10 days a) Rs.50 for each day of default b) No up gradation of distribution system is required - Within 12 days b) Rs.100 for each day

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Example:Guaranteed Service Standards(APRC)

c)Erection of substation as per APERC approved Date c) Rs.250 for each day of default outages / Shutdown a)Inspection & check the meter correctness Inspection within 7 days a) Rs.50 for each day Complaints on meter b) Replacement of stuck up / slow running / creeping meter Inspection within 7 days b) Rs.50 for each day of default

c) Replacement of burnt meter if cause attributable to licensee Within 7 days c) Rs.50 for each day of default

d) Replacement of burnt meter if cause attributable to consumer Within 7 days d) Rs.50 for each day of default

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Transfer: a) Title transfer for onwership Within 7 days a) Rs.50 for each day of default b) Change of category Within 7 days b) Rs.50 for each day of defaultc) Conversion from LT 1 phase to LT 3 phase Vice Versa Within 30 days Rs.50 for each day of default d) Conversion from LT to HT and vice versa after agreement conversion of services Within 60 days d) Rs.100 for each day of default Resolution of Complaints on Within 24 Working hrs. of receipt of complaint - Rs.25 for each day of defaultconsumer's bills Release of supply to LT Services 30 Days from existing Network - Rs.50 for each day of default- 30 Days after paying for Network charges- Rs.50 for each day of default

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Release of supply to HT Services: a) HT- 11 KV supply -Within 30days a) Rs.250 for each day of default

b) HT- 33 KV supply -Within 60days b) Rs.250 for each day of default c) Extra HT KV supply -Within 180days c ) Rs.250 for each day of default d)Erection of substation required for release of connection-Within 30days d) Rs.500 for each day of default

Reconnection of supply following disconnection:

4 Hours Rs.50 in each case of default

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Indian Electricity Act 2003 Theft

Sec.126.

The assessment is to be made for 3 months for domestic and agricultural services and 6 months for other services.

The consumer could always say that he/she did not receive any notice from the utility. Now the Act says that it could be served on any person available.

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Indian Electricity Act 2003 Theft Sec.127.

There is only one appeal.

It is to be made within 30 days after making one third payment.

Earlier, there was protracted litigation without any payment or with nominal payment.

After such long periods, interest too was not levied.

This section specifies 16% half yearly compounded interest after 30 days of order of assessment and not from the date of serving of the notice.

Further, the decision is final.

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Sec.135.

Criminal prosecution is to be launched on the person who DISHONELSTLY taps, tampers, damages etc.

a. 3 years imprisonment or fine or both can be levied. For the first offence, the fine is at 3 times the loss sustained by the utility. For the second offence, it is at 6 times and if the connected load is more than 10 kw, imprisonment is from 6 months to 5 years.

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b. The burden of proof rests on the consumer.

c.The inspecting officer can break open, seize and remove records.

d.But the presence of one adult male member of the family is necessary from 6 p. m. to 6 a. m.

Sec.151. Power theft is cognisable offence

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Sec.153. • A special court shall be constituted for these cases

with a judge of the cadre of Additional District and Sessions Judge.

• Setting the special police stations and courts to prosecute electricity consumers involved in power pilferage.

• West Bengal, Gujarat, Madhya Pradesh, Rajasthan, Orissa and Karnatka have set up the special police stations and courts to check up massive pilferage.

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Theft Occurrence

• In India, about 10-15% of electricity generated is pilfered.

• Campaign against Theft: For example in Haryana1. Meter box installed outside house of

consumer doing theft is painted red.2. In 5 newspapers thiefs’ photograph is

given.

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Pilferage Increases:

Technical Average Losses = ~ 2%

THEFT

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Indian Electricity Act 2003– Consumer Friendly

Every Licensee shall establish a forum for consumer grievance redressal.Commission appoints/designate Electricity Ombudsman as appellate authority (S.42)A person who is prepared to take the supply through a pre-payment meter need not pay security (S47)Commission shall issue Supply code, distribution code in respect of terms and conditions of supply which is binding on licensees and consumers.(S.50)

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Consumer can elect to purchase and he / she need not pay security for meter to the licensee (S55)

No sum due from any consumer shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges (S56)

Regulation on Standard of Performance insists on certain standards on power supply quality failing which the licensee has to pay compensation charges to consumer (S.57)

Indian Electricity Act 2003

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Indian Electricity Act 2003Section 55: Metering , Billing and Collection

Metering for all including free power The Act lay down to achieve 100% metering

within two years of enactment of the Act. The Act provides metering for energy

accounting and audit TOD meters for large consumers with a

minimum load of one MVA are also to be encouraged.

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Indian Electricity Act 2003Section 53 Provision relating to safety and

electricity supply- “The Central Electricity Authority may in consultation with the State Government specify suitable measures for:-

(a) Protecting the public (including the persons engaged in the generation, transmission, distribution or trading) from dangers arising from the generation, transmission, distribution or trading or use of electricity supplied or installation, maintenance or use of any electric line or electrical plant.

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(b) Eliminating or reducing the risks of personal injury to any person, or damage to property of any person or interference with use of such property.

(c) Prohibiting the supply or transmission of electricity except by means of a system which conforms to the specifications as may be specified.

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(d) Giving notice in the specified form to the Appropriate Commission and Electrical Inspector, of accidents and failures of supplies or transmissions of electricity.

(e) Keeping by a generating company or licensee the maps ,plans and sections of supply or transmission of electricity.

(f) Inspection of maps, plans and sections by any person authorized by it or by electrical inspector or by any person on payment of specific fee.

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(g) Specifying action to be taken in relation to any electric line or electrical plant, or any electrical appliance under the control of a consumer for the purpose of eliminating or reducing the risk of personal injury, or damage to the property or interference with its use.

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Section 73(c) relates to CEA specifying the safety requirements for construction, operation and maintenance of electric plants and electric lines.

Section 161 relates to reporting of accidents and inquiry of accident.

Section 162 deals with appointment of Chief Electrical Inspector and Electrical Inspector.

Section 185(1) is regarding repeal of the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998.

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Section 185(2) (C) states that Indian Electricity Rules, 1956 made under Section 37 of the Indian Electricity Act, 1910 as it stood before such repeal shall continue to be in force till the regulations under Section 53 of this Act are made

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Important Changes In The Act 2003Important Changes In The Act 2003A : Generation:Generation:1. No need of license for a generating company from CEA,

state board or regulator if it complies with the technical standard relating to connectivity with the grid ,except for hydro power.

2 Freedom for captive generation and dedicated transmission lines, operate and maintain sub stations.

3 Permission of open access for a captive plant owner for his own use without any surcharge.

4 No license for generating and distributing in rural area.5 Formulation of a National policy on rural distribution,

local distribution and renewable/non-conventional resources.

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Important Changes In The Act 2003Important Changes In The Act 2003

B : DistributionDistribution

1. Provision for time bound electricity supply agreement between the Discom and consumer.

2 More than one distribution company can be allowed in a single area with their own distribution network.

3 Permission of the wheeling of the electricity between two areas, with appropriate wheeling charge.

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Important Changes In The Act 2003Important Changes In The Act 2003 C : TRANSMISSIONTRANSMISSION

1. Establishment of NLDC , RLDCs and SLDCs at different levels.

2. Promotion to non discriminatory open access in transmission.

3. Promotion for efficient , economical and integrated supply of electricity by:

- dividing India into regions- optimal scheduling by NLDC among RLDCs- ensuring the integrated operation by RLDCs and SLDCs

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4. Empowering RLDCs and SLDCs to supervise & control to ensure stability ,efficiency & economy of grid operation in the region and state.

5. Formation of national grid. 6. Promotion to inter-state transmission of

electricity.

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D : OPEN ACCESSOPEN ACCESS

“Open access” means the non-discriminatory provision for the use of transmission

lines or distribution system or associated facilities with such lines or system by

any licensee or consumer or a person engaged in generation in accordance with the

regulations specified by the appropriate commission.

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Salient Points about Open Access in Electricity Act 2003 1 The licensees, consumers and Gencos have to pay

transmission /wheeling charges for open access. Consumers has to also pay a surcharge.

2. Surplus electricity can be transferred to any other licensee with the order of ERC.

3 Promotion to non discriminatory open access by state transmission utility.

4 ERC has to determine by June 10, 2004 the phases and conditions, subject to which open access would be introduced.

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Responsibilities Of Different Utilities In The Electricity After Act 2003

A : Central Electricity Regulatory Commission \ State Electricity Regulatory Commission

1. Open access transmission – Order any other licensee owing or operating intervening transmission facilities to provide use of facilities to extent of surplus capacity.

2. Open access distribution- Specify phases in which open access shall be introduced subject to conditions and wheeling charge.

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3. Authorize distribution licensee- Charge from a person for supply of electricity expenses reasonably incurred in providing electric line or plant for such supply.

4. Specify code for Generating company to supply electricity to any licensee or to any consumer and submit technical details to the ERC.

5. Specify an Electricity Supply Code and standards of performance of a licensee or a class of licensees.

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B : Central Transmission Utility \ State Transmission Utility:

1. To provide non discriminatory open access to its transmission system by any licensee or generating company or to any consumer.

2. To determine the availability of transmission facility in open access.

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C : Government of India \ State Government1. Directions to operate and maintain any genco in extraordinary

circumstances –arising out of threat to security of state, public order , natural calamity or any circumstances arising in public interest.

2. Region wise demarcation of the country for efficient, economical and integrated transmission and supply of electricity

3. Directions to RLDC or SLDC for smooth and stable transmission of supply of electricity.

4. Prescribe additional requirements for 2nd distribution licensee.

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D : Central Electricity AuthorityTransmission side• Lay down Grid Standards.

Distribution side• Specify suitable measures relating to safety and

electricity supply.• Regulations for installation of meters.

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Effect Of Act 2003 Over Transmission Side

1. Market condition for more competition.

2 New opportunities for power trading and inter-state transmission.

3 Complex market structure.

4 More efficiency in transmission.

5 New pricing models schemes.

6 More investments in transmission.

7 Need for more network capacity.

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1. More efficiency due to optimal scheduling and dispatch of electricity.

2. More private participation by Captive generation. Open access. Delicensed generation.

3. More accountability for generation availability.

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1. More power to distribution licensee.

2 More options to distribution companies.

3 High competition among distribution companies.

4 More accountability of distribution company to consumers.

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Challenges And Solutions After The Act 2003

1 Optimal scheduling and dispatching 2 More sophisticated monitoring and control techniques

development3 Congestion management4 Ancillary service management5 Open access6 Proper Loss estimation for different sectors of power

system 7 Defining a blueprint for wholesale electricity trading

agreement of the future Transmission8 Use of Information Technology in different field of power

system9 New decision tools for market participant

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Open Access issuesOpen Access issues

1. The critical role of regulatory commission

2. Transmission pricing

3. Minimum transmission cost to increase competition

4. More complexity in development in transmission system

5. Increased responsibilities of transmission utilities

6. Available transfer capacity

7. Congestion management

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Use of Information Technology in different Use of Information Technology in different field of Power system:field of Power system:

• Information plays a major role in the deregulated market to pass the information to ISO/RTO

• IT tool not only reduce the amount of time but also it takes a participant to execute its market strategy and they can also reduce the potential for errors.

• Market participants needs an IT system that will provide all constituencies with the operation data.

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Use of Information Technology in Use of Information Technology in different field of Power systemdifferent field of Power system

• IT needs from a single central repository that is accessible by everyone from traders to plant managers.

• Automating the information that defines this relationship reduces the potential for error and minimizes the Market participant's time to market.

• Automation and IT should minimize the amount of human invention required to interact with the market.

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• Market participant’s need to be rely on a product that automatically validates bids against market rules for syntax, data independency and the ISO/RTO communication protocols.

• The trader, the scheduler or other Market participants staff member should be concerned with, is marketing sound business decisions, not whether the information they are exchanging with market adheres to market requirements.

Use of Information Technology inUse of Information Technology in different field of Power systemdifferent field of Power system

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ConclusionsConclusions

1. The act addresses the issues of increasing demand supply gap and other fundamental problems faced by the power sector.

2. Consumers can look forward to better availability, increased options for buying and freedom to select their distributors based on quality, efficiency and cost of services provided.

3. The Act gives a common nationwide platform for the reforms.

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4. Aims to create discipline into the system by promoting some fundamental principles like consumer choice, open access, competition, market dynamics, financial viability, power trading, subsidy imbalance correction and rural electrification.

5. Anti-theft provisions and strengthening of the network will do reduction in transmission and distribution (T&D) losses.

6. Systematic unbundling of the state electricity boards

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7. Delicensing of thermal power generation, captive power generation ,Tariff rationalization ,reduction and gradual elimination of cross-subsidies are the good side of this Act.

8. Generating companies will be able to bypass the distribution companies and sell bulk power directly to customers.

9. Act reduces government intervention by doing away with the mandatory techno-economic clearances by the Central Electricity Authority (CEA).


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10. The success of the Electricity Act, will depend on a joint and concerted effort from both the central and state governments.

11. The reforms must be pursued in right earnest with boldness, strong commitment and a firm resolve.

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1. CEA –CENTARL ELECTRICITY AUTHORITY2. NLDC-NATIONAL LOAD DISAPATCH CENTER3. RLDC -REGIONAL LOAD DISAPATCH CENTER4. SLDC- STATE LOAD DISAPATCH CENTER5. ERC-ELECTRICITY REGULATORY COMMISSION6. GENCO- GENERATING COMPANY7. DISCOM-DISTRIBUTION COMPANY8. ISO-INDEPENDENT SYSTEM OPERATOR9. BSC-BILATERAL SCHEDULING COORDINATOR10. NETA-NATIONAL ELECTRICITY TRADING ARRANGEMENTS11. RTO-REGIONAL TRANSMISSION OPERATOR12. SCADA- SUPERVISOR CONTROL AND DATA ACQUISITION 13. WAN-WIDE AREA NETWORK14. NGC-NATIONAL GRID COMPANY

15. IPP-INDEPENDENT POWER PRODUCER

Terminology:

electricity act 2003

Documents

electricity sector

electricity supply act

indian electricity act

national electricity

electricity of good

power sector

central government

power tariffs