Background:
The Electricity Act, 2003 was enacted to consolidate the laws relating to generation, transmission, distribution, trading, and use of electricity in India. It replaced multiple earlier laws to create a unified legal framework for the power sector. The Act aims to promote competition, improve efficiency, ensure rational tariff structures, and provide access to electricity for all consumers while safeguarding the interests of licensees and consumers
Applicability:
The Act applies to:
Compliance requirement under the Act
All electricity generating units of the country of capacity 0.5 MW and above have to get registered with CEA and get a unique registration number from CEA.
No person shall transmit electricity unless he is authorised to do so by a licence issued under section 14, or is exempt under section 13.
A licensee shall not, without prior approval of the Appropriate Commission, acquire or merge with another licensee’s utility, unless the utility is in a different State.
i) Every licensee shall, before obtaining the approval give not less than one month’s notice to every other licensee who transmits or distributes electricity in the area of such licensee who applies for such approval.
Every licensee, generating company, generating station, sub-station and any other person connected with the operation of the power system shall comply with the directions issued by the Regional Load Despatch Centres under Section 29(1).
All directions issued by the Regional Load Despatch Centres to any transmission licensee of State transmission lines or any other licensee of the State or generating company (other than those connected to inter State transmission system) or sub-station in the State shall be issued through the State Load Despatch Centre and the State Load Despatch Centres shall ensure that such directions are duly complied with by the licensee or generating company or sub-station.
Every licensee, generating company, generating station, sub-station and any other person connected with the operation of the power system shall comply with the directions issued by the State Load Despatch Centre under Section 33(1).
The State Load Despatch Centre shall comply with the directions of the Regional Load Despatch Centre.
Every transmission licensee shall comply with such technical standards of operation and maintenance of transmission lines, in accordance with the Grid Standards, as may be specified by the Authority.
Penalties & Punishments
Conclusion
The Electricity Act, 2003 provides a comprehensive legal and regulatory framework for India’s power sector. It ensures systematic governance of electricity generation, transmission, distribution, and trading while promoting efficiency, reliability, and competition. Compliance with the Act is essential for legal operation, consumer protection, and smooth functioning of the electricity supply system across the country.
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