Chapter V LICENSING OF TRANSMISSION AND SUPPLY

1. (1) No person, other than those authorised to do so by licence or by virtue of exemption under this Act or who is authorised or exempted under Indian Electricity Act,1910 (Act 9 of 1910) or the Electricity (Supply) Act, 1948 (Act 54 of 1948), shall engage in the State in the business of:--
   • (a) transmitting electricity; or
   • (b) supplying electricity including bulk supply, sub-transmission or distribution: Provided that all persons who are authorised or exempted under the Indian Electricity Act,1910 (Act 9 of 1910) or the Electricity supply Act,1948 (Act 54 of 1948) shall be deemed to be licensees under this Act on the terms and conditions on which the licence or exemption has already been granted and the provisions of this Act applicable to a licensee shall apply mutates mutandis to such person.
2. (2) Where any question arises as to whether any person is or is not in the business of transmitting or supplying electricity as described in sub-section (1), the decision of the Commission on such question shall be final and binding.
3. (3) The Commission shall have the power to order any person not licensed or otherwise authorised to cease operating and disconnect its apparatus relating to transmission, sub-transmission, distribution or supply of electricity in the State.
4. (4) Notwithstanding anything contained in this Act and during the period of six months from the commencement of this Act, the State Government shall have the power to grant provisional licence for a duration not exceeding twelve months to any person or persons to engage in the State in the business of transmitting or supplying of electricity on such terms and conditions as the State Government may determine consistent with the provisions of this Act, subject to the following conditions:--
   • (a) each of the provisional licence granted by the State Government shall forthwith be placed before the Commission and shall be deemed to constitute an application for grant of a licence by the Commission under the provisions of this Act, and
   • (b) each provisional licence granted under this section shall cease to be valid from the date the Commission may specify in its order on the application for license mentioned in clause (a) above.
5. (5) The State Government shall be entitled to confer on a provisional licensee under sub-section (4) such powers, rights and authorisation as the Commission is entitled to grant to a licensee under this Act.
6. (6) The Commission shall be entitled to exercise all powers and functions under this Act in relation to any provisional licensee under sub-section (4) in the same manner as in the case of a licensee under Section 15 of this Act.

1. (1) The Commission may on an application made in such form and on payment of such fee as the Commission may prescribe, grant a licence authorizing any person to-
   • (a) transmit electricity in a specified area of transmission; or
   • (b) supply electricity in a specified area of supply or bulk supply electricity to any other licensee or person to undertake sub-transmission or distribution or supply of electricity.
2. (2) In respect of the grant of any such licence the following provisions shall apply :--
   • (a) any person applying for a licence shall publish a notice of the application in such manner, and with such particulars as may be prescribed by the Commission within 14 days after making the application;
   • (b) the Commission shall not grant a licence until-
     • (i) all objections received relating to the application for the licence have been considered by the Commission: Provided that no objection may be considered by the Commission unless it is received within such time from the date of the first publication of the notice under clause (a) as the Commission may prescribe which shall not be less than 30 days; and
     • (ii) in the case of an application for a licence to supply or transmit in an area which includes the whole or any part of any cantonment, aerodrome, fortress, arsenal or camp or of any building or place in the occupation of the Central Government for defence purposes, the Commission has ascertained that there is no objection to the grant of the licence on the part of the Central Government.
3. (3) Notwithstanding anything contained in Section 52of the Indian Electricity Act,1910 (Act 9 of 1910) or clause (ii) of sub-section 3 and Section 76 of the Electricity (Supply) Act, 1948 (Act 54 of 1948), it shall be a condition of all licenses granted under this act that the Commission shall have the power to act as an arbitrator or nominate arbitrator or arbitrators to adjudicate and settle the disputes arising between the licensees in accordance with the provisions of this Act.
4. (4) (a) A licence shall contain the duration, extent to which, and the terms and conditions under which the transmission or supply of electricity is to be made and contain such other conditions as the Commission may consider appropriate for achieving the purposes of this Act.
   • (b) Without prejudice to the generality of the provisions of clause (a), the licensee shall be required to-
     • (i) enter into agreements on specified terms with other persons for the use of any electric lines, electrical plant and associated equipment operated by the licensee;
     • (ii) furnish information and documents which the Commission may require for its purpose or for the purposes of the Central or State Government or the Central Commission or Central Electricity Authority;
     • (iii) undertake such functions and obligations of the Board under the Indian Electricity Act,1910 (Act 9 of 1910)and the Electricity (Supply)Act, 1948 (Act 54 of 1948),as the Commission may specify;
     • (iv) obtain the approval of the Commission of things that are required under the licence conditions or for deviation from the same;
     • (v) notify the Commission of any scheme that the licensee is proposing to undertake including the schemes in terms of the provisions of the Electricity (Supply) Act,1948 (Act54 of 1948);
     • (vi) purchase electricity in an economical manner which shall include consideration of the principle of the least cost dispatch of power and under a transparent power purchase procurement process;
     • (vii) evolve scheme for metering points of supply of electricity for all consumers and for measures for reduction of losses in the transmission and supply of electricity.
     • (viii) supply in bulk to other licensees or to customers.
     • (ix) comply with any direction given by the Commission;
     • (x) act in accordance with the terms of the licence; and
     • (xi) Comply with requirements of this Act, the regulations, the Indian Electricity Act, 1910 (No.9 of 1910) and the Electricity (Supply)Act,1948 (No. 54 of 1948) or rules framed thereunder in so far they are applicable.
5. (5) Without prejudice to the generality of the provisions contained in sub-section (4), conditions included in a licence granted by the Commission may require the holder of the licence to establish tariff and to calculate its charges from time to time consistent with the provisions of this Act.
6. (6) The provisions contained in the schedule to the Indian Electricity Act, 1910 (No.9 of 1910) shall be deemed to be incorporated with, and to form part of, every supply licence granted under this part save in so far as they are expressly varied or exempted by the licence and shall, subject to any such additions, variations or exceptions which the Commission may make having regard to the purposes of this Act, apply to the undertaking authorised by the licence in relation to its activities in the State: Provided that where a supply licence is granted by the Commission for the supply of Electricity to other licensees for distribution by them, then in so far as such licence relates to such supply ̧ the provisions of clauses IV, V VI, VII, VIII and XII of the said Schedule shall not be deemed to be incorporated within the supply licence.
7. (7) The conditions included in a licence may contain provision for the conditions to cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined by or under the conditions.
8. (8) Any provisions included by virtue of sub-section
9. (7) in a licence shall have effect in addition to the provision made by Section 17 and sub-section (5) of Section 18 of the Act.
10. (9) Unless otherwise specifically provided in the terms of a licence, the grant of licence to a person shall not in any way hinder or restrict the grant of a licence to another person within the same area of supply for a like purpose and the licensee shall not claim any exclusivity.
11. (10) The licence granted by the Commission in terms of this Act may provide that the licensee shall have the powers and authority to take actions for metering points of supply of electricity , revenue realization, disconnection of electricity, prosecution for theft, meter tampering , diversion of electricity , and all such and similar matters affecting the transmission, sub-transmission, distribution or supply of electricity as the Commission may prescribe.
12. (11) The Commission shall be entitled to authorise the licensees and other persons to exercise power and authority as the licensees and persons could be given under the provisions of the Electricity Act, 1910 (No. 9 of 1910) and the Electricity (Supply) Act, 1948 (No. 54 of 1948)

1. (1) The Commission may make regulations to grant exemption from the requirement to have a license, but the subject to compliance with such conditions, if any, as may be specified by the Commission : Provided that a person exempted shall be required to comply with all the requirements, which a licensee is required to do so either under the licence or under the provisions of this Act or the regulations except where the commission may otherwise specifically, provide under the order granting the exemption or under the regulations.
2. (2) The Commission shall not, under any such regulation, grant any exemption except with the consent---
   • (i) of the local authority, if any, constituted in the area where electricity is to be supplied;
   • (ii) of the Central Government, in any case where electricity is to be supplied in any area forming part of any cantonment, aerodrome, fortress, arsenal, or camp or any building or place in the occupation of the Central Government for defence purposes;
   • (iii) in any area falling within the area of transmission or supply, of the licensee of such area: Provided further that, except in a case falling under sub-clause (ii) no such consent shall be necessary if the Commission is satisfied that such consent has been unreasonably withheld.
3. (3) An exemption may be granted-
   • (a) to person of a particular category; or (b)to a particular person; or (c) for a particular period.
4. (4) An exemption granted shall be published in such manner as the Commission considers appropriate.
5. (5) The exemption granted may be revoked by the Commission at anytime for reasons to be recorded in writing.
6. (6) An exemption, unless previously revoked, shall continue in force for such period as may be specified in or determined by or under the order granting the exemption.

1. (1) The Commission may, where in its opinion the public interest so permits or requires and in accordance with the provisions of this Act, on the application of the licensee or if the licensee is not a local authority on the application of the local authority concerned or otherwise make such alterations and amendments to the terms and conditions of a licence as it thinks fit taking into account the object and purposes of this Act: Provided that no such alterations or amendments, other than an alteration or amendment pursuant to a licence condition referred to in sub-section (7) of Section 15 or sub-section (5) of Section 18 shall be made except with the consent of the licensee.
2. (2) Where the licensee has made an application under sub-section (1) proposing any alterations or amendments in the conditions of his licence, the following provisions shall apply:--
   • (a) the licensee shall publish a notice of the application in the manner and with the particulars as may be prescribed by the Commission;
   • (b) the Commission shall not make any alterations or amendments until all objections received by it with reference to the application within such time from the date of the first publication of the notice which the Commission may specify, which shall not be less than 30 days, have been considered ; and
   • (c) in the case of an application proposing alterations or amendments in the conditions of licence granted for an area of supply comprising the whole or any part of the cantonment, aerodrome, fortress, arsenal, or camp or of any building or place in the occupation of the Central Government for defence purposes, the Commission shall not make any alterations or amendments except with the consent of the Central Government.
3. (3) Before making any alterations or amendments in the conditions of a licence otherwise than on the application of the licensee, the Commission shall publish the proposed alterations or amendments and consider all objections received by it with reference to the proposed alterations or amendments within such time from the date of the publication of the notice as the Commission may specify which shall not be less than 30 days.

1. (1) The Commission may inquire into the conduct or functioning of any licensee in carrying out the obligations under this Act or the regulations framed there under or the terms and conditions of the licence---
   • (a) upon receiving a complaint from any consumer or consumer association or any trade association; or
   • (b) upon a reference made to it by the State Government or by the Central Commission or the Central Government or the Electricity Authority or any other Authority; or
   • (c) upon receiving a complaint from any company or person involved in the generation, transmission, sub-transmission, distribution or supply of electricity; or
   • (d) upon its own knowledge or information derived from any source.
2. (2) After making the inquiry under sub-section (1), the Commission may, if in its opinion the public interest so requires, revoke a licence in any of the following cases namely:--
   • (a) where the licensee, has committed a wilful or unreasonable default in doing anything required by or under this Act or regulations made thereunder or the Indian Electricity Act, 1910 (No.9 of 1910) or the Electricity (Supply) Act,1948 (No. 54 of 1948) or rules or regulations made there under to the extent applicable in the State read with the provisions of this Act;
   • (b) where the licensee commits a breach of any of the terms and conditions of the licence, the breach of which is expressly declared by such licence to render it liable to revocation;
   • (c) where the licensee fails within the period specified in the liecence or any longer period that the Commission may allow by order-
     • (i) to show, to the satisfaction of the Commission, that it is in a position to fully and efficiently discharge the duties and obligations imposed by the licence; and
     • (ii) to make the deposit or furnish the security required by the licence; and
   • (d) where the financial position of the licensee is such that the licensee is unable to fully and efficiently discharge the duties and obligations imposed on him by the licence.
3. (3) Notwithstanding anything contained in the provisions of sub-sections (1) and (2) where the public interest so requires, the Commission may, on the application or with the consent of the licensee, and if the licensee is not a local authority, after consulting the local authority concerned, revoke licence as to the whole or any part of the area of transmission or supply upon such terms and conditions as it thinks fit.
4. (4) No licence shall be revoked under sub-section (2) unless the Commission has given to the licensee not less than 30days notice in writing, stating the grounds on which it is proposed to revoke the licence and has considered any cause shown by the licensee within the period of that notice, against the proposed revocation and has given reasons for such revocation.
5. (5) The Commission may, instead of revoking the licence, permit it to remain in force subject to such further terms and conditions as it thinks fit to impose and the terms or conditions so imposed shall be binding upon , and be observed by, the licensee, and be of like force and effect as if they were contained in the licence.

1. (1) Notwithstanding anything contained in Section 6 and 7 of the Indian Electricity Act, 1910 (No.9 of 1910), where the Commission revokes a licence, under sub-section (2) of Section 18 the following provisions shall apply:--
   • (a) the Commission shall serve a notice of revocation upon the licensee and shall fix a date on which the revocation shall take effect on and with effect from that date, or on and with effect from the date, if earlier on which the undertaking of the licensee is sold to a purchaser in pursuance of any of the provisions of this Act shall absolutely cease and stand determined except for any obligation or liabilities that had accrued to that date;
   • (b) the Commission shall invite application for acquiring the undertaking of the licensee whose licence has been revoked and determine the price payable and other terms and conditions of the sale of the undertaking;
   • (c) the Commission may by notice in writing require the licensee to sell at the price on terms and conditions determined under clause (b)and thereupon the licensee shall sell the undertaking to the person (hereinafter in this section referred to as "purchaser") and whose application has been accepted by the Commission; and
   • (d) the Commission may make such interim arrangement in regard to the undertaking of the licensee for maintaining the electricity transmission and supply as may be considered appropriate including the appointment of administrators and special directors for the undertaking of the licensee.
2. (2) Where an undertaking is sold under sub-section(1), the purchaser shall deposit the purchase price of the undertaking determined in accordance with the application submitted by the purchaser as per the directions of the Commission and the Commission shall have the powers to direct that the outstanding amount of any fine , charge or compensation levied on the licensee in terms of Section 31 of the Act or any other amount due or outstanding from the licensee to the commission or to any other person as per the orders passed by the commission be first adjusted out of the amount deposited before releasing the amount to the licensee concerned.
3. (3) Where the Commission issues any notice under sub-section (1) requiring the licensee to sell the undertaking, it may by such notice require the licensee to deliver the undertaking and thereupon the licensee shall deliver on a date specified in the notice , to the designated purchaser pending the payment of the purchase price of the undertaking: Providing that in any such case, the purchaser shall pay to the licensee interest at such rate not exceeding the Reserve Bank lending rate ruling at the time of delivery of the undertaking as the Commission may decide, on the purchase price of the undertaking for the period from the date of delivery of the undertaking to the date of payment of the purchase price.
4. (4) The licensee shall duly implement the orders of the Commission under this section, notwithstanding that the licensee may be aggrieved by the order and intends to challenge the orders of the Commission.

1. (1) It shall be the duty of the holder of a licence to develop and maintain an efficient ,coordinated and economical system of electricity transmission, sub-transmission, distribution or supply in the area of transmission or area of supply or bulk supply of electricity , as the case may be, for which the licence has been granted.
2. (2) Each licensee and each generating companies shall comply with the provisions of the regulations framed from time to time governing the operation and maintenance of power system and electric supply lines.
3. (3) Subject to restrictions, exceptions and conditions, if any, the Commission may specify the Section12 to 19 of the Indian Electricity Act, 1910 (No. 9 of 1910), which relate to the carrying out of works , shall have effect in relation to a person authorised by a licence under this Act to transmit or supply electricity, as if the person is a licensee in that Act.

1. (1) No licensee or generating company shall, at any time, without the previous consent in writing of the Commission, acquire by purchase or otherwise the licence or the undertaking of, or associate with, so far as the business of generation, transmission, sub-transmission, distribution or supply of electricity, is concerned , any other licensee or person generating, transmitting, supplying or intending to generate, transmit or supply electricity: Provided that, before applying for such consent, the licensee shall give not less than one month’s notice of the application---
   • (a) to the Commission, and
   • (b) if the licensee holds a supply licence, to every local authority both in the licensee's area of supply and also in the area, if any , in which such other person supplies, or intends to supply electricity. Explanation-For the purpose of this section a person shall be deemed to be associated with another if he is connected with the other by reasons of ownership, management or in any other manner and is in pursuit of a joint business interest with the other.
2. (2) The licensee shall not, at any time, assign his licence or transfer his undertaking, or any part thereof, by sale, mortgage, lease, exchange or otherwise without the previous consent in writing of the Commission.
3. (3) The provisions of Section 44 of the Electricity (Supply) Act, 1948 (No. 54 of 1948) shall apply in the State after the coming into force of this Act with the following amendments:-
   • (a) that the consents required in the said sections shall be taken from the Commission, instead of such consents to be obtained from the Board as provided under that section;
   • (b) notwithstanding anything contained in Clauses (a),
   • (b) and (c) of the proviso to sub-section (1) of the said Section 44, the Commission shall have the right to refuse the consent if in the opinion of the Commission, that the Grant of consent will adversely affect the operation of the power or the development of the electricity industry in the State in an efficient manner or otherwise the public interest; and
   • (c) the provisions of sub-section (3) of said Section 44 will have no application in the State.
4. (4) A holder of a supply licence may, unless expressly prohibited by the terms of its licence or by a general or special order passed by the commission, enter into arrangements for the purchase of electricity from-
   • (a) the holder of a supply licencee which permits the holder of such licence to supply electricity to other licensees for distribution by them; and
   • (b) any generating company or other supplier of electricity in accordance with the regulations prescribed by the Commission governing the power purchase procurement process.
5. (5) Any agreement relating to any transaction of the nature described in sub-sections (1), (2),
6. (3) or (4) unless made with, or subject to the provisions contained in the said provisions, shall be void.

Every licensee shall, unless expressly exempted by the Commission, prepare and render to the Commission, before the date to be specified by the Commission, an annual statement or statements of accounts of its undertaking and of each of separate business unit made up to such date, in such form and containing such particulars and audited or verified, as may be directed by the Commission and such statements or extracts thereof shall be published in the manner specified by the Commission.