The need for enactment of Electricity Act 2003,was felt by the Central Government in the backdrop of the on going Economic Reforms in the country coupled with power sector reforms in various States.

1. PRESENTATION ON
INDIAN ELECTRICITY ACT 2003

2.  Overview
• Need of Electricity Act 2003
• Purpose of the Act
• An overview of Electricity Act 2003
• Generation, Transmission &Distribution Ownership
• Salient features of Electricity Act 2003

3. Need of Electricity Act 2003
 The need for enactment of Electricity Act 2003,was felt by the Central
Government in the backdrop of the on going Economic Reforms in the country
coupled with power sector reforms in various States.
 To take care of the current needs of power sector in the areas of Generation,
Transmission, Trading and Distribution of Electricity.
 Electricity Act 2003 is a single legislation which addresses all the key areas of
Electricity in the country and provides a road map for over all and uniform
development of electricity sector in the country.

4.  Purpose of theAct
To combine the laws relating to generation, transmission, distribution, trading
and use of electricity.
To take possible measures for development of electricity sector.
To promote Competition in the sector.
To protect the interests of Consumers.
To rationalize the electricity tariffs
To Establish Regulatory commissions and Appellate Tribunal for Electricity.
To ensure supply of electricity to all areas.
To rationalize tariff and lowering the cross-subsidization levels..

5. An overview of Electricity Act 2003
An overview of
Electricity Act
2003
Enacted in 2003
and given to
effect from 10th
June 2003
Consists of 18
parts, 185
Sections and one
schedule.
It extends to the
whole of India
except the State of
Jammu and
Kashmir.

6.  Generation, Transmission & Distribution Ownership
 Generation is owned by
 Central (25.18%) / State (28.35%) / Private (46.47%)Sectors
Private
(46.47%)
State
(28.35%)
Central
(25.18%)

7. .
Transmission - more than 90% is owned by public sector
• Distribution - about 13% owned by private sector

8. Salient
features of
Electricity Act
2003
Role of Government
Rural Electrification
Restructuring of SEBs
Measures against Theft of
electricity
Central Electricity
Authority
Consumer Protection
Trading/Market
Development
Tariff Principles

9.  Role of Government
 Central Government to prepare Policy of act.
 National Electricity Policy and Tariff.
 Central Govt. to notify a National Policy for rural areas permitting stand alone
systems based on renewal and Non-Conventional energy sources in consultation
with States.
 Central Government to formulate a National Policy in consultation with the
concerned State. for bulk purchase of power and management of local distribution
through Users Association, Cooperatives, Franchisees and Panchayat Institutions
etc.

10.  Rural Electrification
➤ Appropriate Government to endeavor to extend supply
of electricity to all villages/hamlets.
➤ No requirement of license if a person intends to
generate and distribute power in rural area.

11.  Restructuring of SEBs
Provision for transfer scheme to create one or more companies from SEB.
Provision for continuance of SEBS.
States given flexibility to adopt model/path.

12.  Measures against Theft of electricity
Focus on revenue realization rather than criminal proceedings.
Penalties linked to the connected load and quantum of energy and financial
gain Search involved in theft.
 Provisions for compounding of offences.
Assessment of electricity charges for unauthorized use of electricity by the
assessing officer designated by the State Government.
Theft punishable with imprisonment.
Punishment provision for abetment of theft.
Special Courts.

13.  Consumer Protection
Consumer to be given connection within stipulated time.
Penalty in the event of failure to give connection.
 Payment of interest on security deposit.
Regulatory commission to specify Electricity supply code to be followed by
licensees.
No sum due from consumers recoverable after a period of two years unless
the same was shown recoverable continuously.

14.  Trading/Market Development
Trading distinct activity permitted with licensing.
Regulatory Commission may fix ceiling on trading margin to avoid artificial
price volatility.
The Regulatory Commission to promote development of market including
trading.

15.  Central ElectricityAuthority
CEA to continue as the main technical Advisor of the Govt. of India/
State Government with the responsibility of overall planning.
CEA to specify the technical standards for electrical plants and
electrical lines.
 CEA to be technical adviser to CERC as well as SERCS.
CEA to specify the safety standards.

16.  Tariff Principles
Regulatory Commission to determine tariff for supply of electricity by
generating co. on long/medium term contracts.
No tariff fixation by regulatory commission if tariff is determined through
competitive bidding or where consumers, on being allowed open access enter
into agreement with generators/traders.
Consumer tariff should progressively reduce cross subsidies and move
towards actual cost of supply.