Mar 11, 2022

5 things you didn’t know about Electricity and the law

Several parts of Mumbai and Mumbai Metropolitan Region (MMR) were affected by a massive power outage today. The reason for the power outage is said to be multiple trippings of power lines supplying power to Mumbai and MMR. It has been reported that nearly 360 MW of power supply has been affected.

  1. Which law regulates electricity transmission?

The Electricity Act, 2003 regulates the generation, transmission, distribution, trading and use of electricity in India. It also aims to develop the electricity industry, promote competition within the industry, protect the interests of consumers, supply electricity to all areas, promote environment friendly policies etc. The Act establishes the Central Electricity Authority, and Electricity Regulatory Commissions at the Central and State levels.

  1. Who can supply electricity?

No person should transmit, distribute or undertake trade in electricity without an authorised license. The person has to apply to the appropriate Electricity Regulatory Commission (Central, State or Joint Commission), which will decide whether to grant the license. The application for license has to be accompanied by the prescribed fee.

Within 7 days of making the application, the person who has made an application should publish a notice of his application with the required details. If any there are any objections to the application within 30 days of publishing the notice, the Commission will first consider the objections before granting the license. If the license application involves electricity supply to cantonments, dockyards, defence areas etc., the approval of the Central government is also required. If a person is granted the license by the Commission, the person becomes a licensee.

  1. Consumer protection

Under the Act, a consumer is any person who is supplied with electricity for his/her own use. The electricity could be supplied by a licensee, by the Government, or by any other person engaged in the business of supplying electricity to the public.

The appropriate Commission may specify standards of performance of a licensee, after consulting the licensee and other stakeholders. Different standards can be specified for different licensees.

If a licensee fails to meet the specified standards, the licensee shall be liable to pay a compensation to an affected consumer. The amount of compensation may be decided by the Commission, and paid by the concerned licensee within 90 days of the Commission’s decision. Before deciding on the compensation, the concerned licensee will be given a reasonable opportunity to explain the failure.

  1. Duties of distribution licensees

A distribution licensee is a licensee who is authorised to operate and maintain a distribution system for supplying electricity to consumers in a specific area. It is the duty of a distribution licensee to develop and maintain an efficient, co-ordinated and economical system for distributing electricity in an area.

Any owner or occupier of a place can apply to a distribution licensee for the supply of electricity. The application should include the details required by the licensee and should be accompanied by documents which show the payment of necessary charges, etc. The distribution licensee should provide electricity within one month of receiving the completed application.

The charges for electricity supplied by a distribution licensee are specified by the concerned State Regulatory Commission. The charges and prices are also published.

  1. Supplying electricity to rural areas

Under the Act, the Central government should prepare and notify a national policy, permitting stand-alone systems of electricity for rural areas. The government should also prepare a policy for rural electrification, including bulk purchase of power and management of electricity distribution in rural areas through Panchayats, co-operative societies, NGOs etc. Both the State and Central governments should jointly try to provide electricity access to all areas including villages through rural electricity infrastructure.


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