DISTRIBUTION OF ELECTRICITY
Provisions with respect to distribution licensees
Duties of distribution Licensee and open access
Duty to supply on request
- 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.
- 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 such open access may
be allowed before the cross subsidies are eliminated 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
and eliminated 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.
- Where any person, whose premises are situated within the area of
supply of a distribution licensee, (not being a local authority engaged
in the business of distribution of electricity before the appointed
date) requires a supply of electricity from a generating company or
any licensee other than such distribution licensee, such person may,
by notice, require the distribution licensee for wheeling such electricity
in accordance with regulations made by the State Commission and the
duties of the distribution licensee with respect to such supply shall
be of a common carrier providing non-discriminatory open access .
- Where the State Commission permits a consumer or class of consumers
to receive supply of electricity from a person other than the distribution
licensee of his area of supply, such consumer shall be liable to pay
an additional surcharge on the charges of wheeling, as may be specified
by the State Commission, to meet the fixed cost of such distribution
licensee arising out of his obligation to supply.
- Every distribution licensee shall, within six months from the appointed
date or date of grant of licence, whichever is earlier, establish a
forum for redressal of grievances of the consumers in accordance with
the guidelines as may be specified by the State Commission.
- Any consumer, who is aggrieved by non-redressal of his grievances
under sub-section (5), may make a representation for the redressal of
his grievance to an authority to be known as Ombudsman to be appointed
or designated by the State Commission.
- The Ombudsman shall settle the grievance of the consumer within such
time and in such manner as may be specified by the State Commission.
- The provisions of sub-sections (5),(6) and (7) shall be without prejudice
to right which the consumer may have apart from the rights conferred
upon him by those sub-sections.
Exceptions from duty to supply electricity.
- Every distribution licensee, shall, on an application by the owner
or occupier of any premises, give supply of electricity to such premises,
within one month after receipt of the application requiring such supply
Provided that where such supply requires extension of distribution mains,
or commissioning of new sub-stations, the distribution licensee shall
supply the electricity to such premises immediately after such extension
or commissioning or within such period as may be specified b commissioning
or within such period as may be specified by the Appropriate Commission.
Provided further that in case of a village or hamlet or area wherein
no provision for supply of electricity exists, the Appropriate Commission
may extend the said period as it may consider necessary for electrification
of such village or hamlet or area.
- It shall be the duty of every distribution licensee to provide, if
required, electric plant or electric line for giving electric supply
to the premises specified in sub-section (1) :
Provided that no person shall be entitled to demand, or to continue
to receive, from a licensee a supply of electricity for any premises
having a separate supply unless he has agreed with the licensee to pay
to him such price as determined by the Appropriate Commission .
- If a distribution licensee fails to supply the electricity within
the period specified in sub-section (1), he shall be liable to a penalty
which may extend to one thousand rupees for each day of default.
Nothing contained in section 43 shall be taken as requiring a distribution
licensee to give supply of electricity to any premises if he is prevented from doing
so by cyclone, floods, storms or other occurrences beyond his control.
Power to recover charges
Power to recover expenditure
- Subject to the provisions of this section, the prices to be charged
by a distribution licensee for the supply of electricity by him in pursuance
of section 43 shall be in accordance with such tariffs fixed from time
to time and conditions of his licence.
- The charges for electricity supplied by a distribution licensee shall
- fixed in accordance with the methods and the principles as may
be specified by the concerned State Commission ;
- published in such manner so as to give adequate publicity for
such charges and prices.
- The charges for electricity supplied by a distribution licensee may
- a fixed charge in addition to the charge for the actual electricity
- a rent or other charges in respect of any electric meter or electrical
plant provided by the distribution licensee.
- Subject to the provisions of section 62, in fixing charges under
this section a distribution licensee shall not show undue preference
to any person or class of persons or discrimination against any person
or class of persons.
- The charges fixed by the distribution licensee shall be in accordance
with the provisions of this Act and the regulations made in this behalf
by the concerned State Commission.
The State Commission may, by regulations, authorise a distribution
licensee to charge from a person requiring a supply of electricity in pursuance of
section 43 any expenses reasonably incurred in providing any electric line or
electrical plant used for the purpose of giving that supply.
Power to require security.
- Subject to the provisions of this section, a distribution licensee
may require any person, who requires a supply of electricity in pursuance
of section 43, to give him reasonable security, as determined by regulations,
for the payment to him of all monies which may become due to him -
- in respect of the electricity supplied to such persons; or
- where any electric line or electrical plant or electric meter
is to be provided for supplying electricity to person, in respect
of the provision of such line or plant or meter, and if that person
fails to give such security, the distribution licensee may, if he
thinks fit, refuse to give the supply or to provide the line or
plant or meter for the period during which the failure continues.
- Where any person has not given such security as is mentioned in subsection
(1) or the security given by any person has become invalid or insufficient,
the distribution licensee may, by notice, require that person, within
thirty days after the service of the notice, to give him reasonable
security for the payment of all monies which may become due to him in
respect of the supply of electricity or provision of such line or plant
- If the person referred to in sub-section(2) fails to give such security,
the distribution licensee may, if he thinks fit, discontinue the supply
of electricity for the period during which the failure continues.
- The distribution licensee shall pay interest equivalent to the bank
rate or more, as may be specified by the concerned State Commission,
on the security referred to in sub-section (1) and refund such security
on the request of the person who gave such security.
- A distribution licensee shall not be entitled to require security
in pursuance of clause (a) of sub-section (1) if the person requiring
the supply is prepared to take the supply through a pre-payment meter.
Additional terms of supply.
A distribution licensee may require any person who requires a supply of
electricity in pursuance of section 43 to accept -
Agreements with respect to supply or purchase of electricity.
- any restrictions which may be imposed for the purpose of enabling
the distribution licensee to comply with regulations made under section
- any terms restricting any liability of the distribution licensee
for economic loss resulting from negligence of the person to whom the
electricity is supplied.
Where the Appropriate Commission has allowed open access to certain
consumers under section 42, such consumers notwithstanding the provisions
contained in clause (d) of sub-section (1) of section 62, may enter into an
agreement with any person for supply or purchase of electricity on such terms and
conditions (including tariff) as may be agreed upon by them.
The Electricity Supply Code.
The State Commission shall specify an Electricity Supply Code to provide
for recovery of electricity charges, intervals for billing of electricity charges
disconnection of supply of electricity for non-payment thereof; restoration of
supply of electricity; tampering, distress or damage to electrical plant, electric lines
or meter, entry of distribution licensee or any person acting on his behalf for
disconnecting supply and removing the meter; entry for replacing, altering or
maintaining electric lines or electrical plant or meter.
Other businesses of distribution licensees.
- A distribution licensee may, with prior intimation to the Appropriate
Commission, engage in any other business for optimum utilisation of
Provided that a proportion of the revenues derived from such business
shall, as may be specified by the concerned State Commission, be utilised
for reducing its charges for wheeling :
Provided further that the distribution licensee shall maintain separate
accounts for each such business undertaking to ensure that distribution
business neither subsidies in any way such business undertaking nor
encumbers its distribution assets in any way to support such business.
Provided also that nothing contained in this section shall apply to
a local authority engaged, before the commencement of this Act, in the
business of distribution of electricity
Provisions with respect to electricity traders
Provisions with respect to electricity trader.
- Without prejudice to the provisions contained in clause (c) of section
12, the Appropriate Commission may, specify the technical requirement,
capital adequacy requirement and credit worthiness for being an electricity
- Every electricity trader shall discharge such duties, in relation
to supply and trading in electricity, as may be specified by the Appropriate
Provisions with respect to supply generally
Provisions relating to safety and electricity supply
- The Authority may in consultation with the State Government, specify
suitable measures for –
Control of transmission and use of electricity
- protecting the public (including the persons engaged in the generation,
transmission or distribution or trading) from dangers arising from the
generation, transmission or distribution or trading of electricity,
or use of electricity supplied or installation, maintenance or use of
any electric line or electrical plant;
- eliminating or reducing the risks of personal injury to any person,
or damage to property of any person or interference with use of such
- prohibiting the supply or transmission of electricity except by means
of a system which conforms to the specification as may be specified;
- giving notice in the specified form to the Appropriate Commission
and the Electrical Inspector, of accidents and failures of supplies
or transmissions of electricity;
- keeping by a generating company or licensee the maps, plans and sections
relating to supply or transmission of electricity;
- inspection of maps, plans and sections by any person authorised by
it or by Electrical Inspector or by any person on payment of specified
- 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 a risk of personal
injury or damage to property or interference with its use;
- Save as otherwise exempted under this Act, no person other than Central
Transmission Utility or a State Transmission Utility, or a licensee
shall transmit or use electricity at a rate exceeding two hundred and
fifty watts and one hundred volts –
- in any street, or
- in any place,-
- in which one hundred or more persons are ordinarily likely to
be assembled; or
- which is a factory within the meaning of the Factories Act, 1948
or a mine within the meaning of the Mines Act, 1952; or declares
63 of 1948.35 of 1952.
- to which the State Government, by general or special order, the
provisions of this sub-section to apply,
without giving, before the commencement of transmission or use of
electricity, not less than seven days’ notice in writing of his intention
to the Electrical Inspector and to the District Magistrate, or the
Commissioner of Police, as the case may be, containing particulars
of the electrical installation and plant, if any, the nature and the
purpose of supply and complying with such of the provisions of Part
XI of this Act, as may be applicable:24 of 1989
Provided that nothing in this section shall apply to electricity
used for the public carriage of passengers, animals or goods, on,
or for the lighting or ventilation of the rolling stock of any railway
or tramway subject to the provisions of the Railways Act, 1989.
- Where any difference or dispute arises as to whether a place is or
is not one in which one hundred or more persons are ordinarily likely
to be assembled, the matter shall be referred to the State Government,
and the decision of the State Government thereon shall be final.
- The provisions of this section shall be binding on the Government.
Disconnection of supply in default of payment.
- No licensee shall supply electricity, after the expiry of two years
from the appointed date,Use, etc., of meters except
through installation of a correct meter in accordance with regulations
to be made in this behalf by the Authority: Provided that the licensee
may require the consumer to give him security for the price of a meter
and enter into an agreement for the hire thereof, unless the consumer
elects to purchase a meter: Provided further that the State Commission
may, by notification extend the said period of two years for a class
or classes of persons or for such area as may be specified in that notification.
- For proper accounting and audit in the generation, transmission and
distribution or trading of electricity, the Authority may direct the
installation of meters by a generating company or licensee at such stages
of generation, transmission or distribution or trading of electricity
and at such locations of generation, transmission or distribution or
trading , as it may deem necessary.
- If a person makes default in complying with the provisions contained
in this section or regulations made under sub-section (1), the Appropriate
Commission may make such order as it thinks fit for requiring the default
to be made good by the generating company or licensee or by any officers
of a company or other association or any other person who is responsible
for its default.
- Where any person neglects to pay any charge for electricity or any
sum other than a charge for electricity due from him to a licensee or
the generating company in respect of supply, transmission or distribution
or wheeling of electricity to him, the licensee or the generating company
may, after giving not less than fifteen clear days notice in writing,
to such person and without prejudice to his rights to recover such charge
or other sum by suit, cut off the supply of electricity and for that
purpose cut or disconnect any electric supply line or other works being
the property of such licensee or the generating company through which
electricity may have been supplied, transmitted, distributed or wheeled
and may discontinue the supply until such charge or other sum, together
with any expenses incurred by him in cutting off and reconnecting the
supply, are paid, but no longer: Provided that the supply of electricity
shall not be cut off if such person deposits , under protest, -
- an amount equal to the sum claimed from him, or
- the electricity charges due from him for each month calculated
on the basis of average charge for electricity paid by him during
the preceding six months,
whichever is less, pending disposal of any dispute between him and
- Notwithstanding anything contained in any other law for the time
being in force, no sum due from any consumer, under this section 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 for electricity supplied and the licensee
shall not cut off the supply of the electricity:
Consumer protection: Standards of performance
Standard of performance of licensee.
Different Standards of performance by licensee.
- The Appropriate Commission may, after consultation with the licensees
and persons likely to be affected, specify standards of performance
of a licensee or a class of licensees.
- If a licensee fails to meet the standards specified under subsection
(1), without prejudice to any penalty which may be imposed or prosecution
be initiated, he shall be liable to pay such compensation to the person
affected as may be determined by the Appropriate Commission: Provided
that before determination of compensation, the concerned licensee shall
be given a reasonable opportunity of being heard.
- The compensation determined under sub-section (2) shall be paid by
the concerned licensee within ninety days of such determination.
The Appropriate Commission may specify different standards under subsection
(1) of section 57 for a class or classes of licensee.
Information with respect to levels of performance.
- Every licensee shall, within the period specified by the Appropriate
Commission, furnish to the Commission the following information, namely:-
- the level of performance achieved under sub-section (1) of the
- the number of cases in which compensation was made under subsection
(2) of section 57 and the aggregate amount of the compensation.
- The Appropriate Commission shall at least once in every year arrange
for the publication, in such form and manner as it considers appropriate,
of such of the information furnished to it under sub-section (1).
The Appropriate Commission may such issue directions as it considers
appropriate to a licensee or a generating company if such licensee or generating
company enters into any agreement or abuses its dominant position or enters into a
combination which is likely to cause or causes an adverse effect on competition in