Legal Framework on Electricity Services in India

In the matter of electricity consumption and production, India ranks among the third-largest producer and consumer of electricity. As of 31st May 2021, in India the national electric grid has an installed capacity of 383.37 GW. 

All over the world, India is developing and shining in the power sector basically for its useful and competent regulation of laws, which is a positive side of this situation. 

The Seventh Schedule of the Indian Constitution set down the subjects and relevantly put such subjects under the three lists Union- List, State List, and Concurrent List- based upon which legislations have been framed by the Parliament and the State legislatures. Among various subjects dealt with under the Concurrent List, electricity is one of the subjects that comes under such purview. 

This piece of legislation on electricity was initiated in 1910, which governed the granting of licenses for the supply of energy in specified areas. In certain cases, with the sanctions of the government, the said Act also allowed supplying energy for the non-licensees. Various rules and regulations have been framed by the Indian Electricity Act, 1910, regarding the supply, transmission, production, and usage of electricity under its provision. Later on, with the flow of time, various electrical growth and rationalization of the production and supply of electricity have been bought subsequently with the enforcement of the Electricity (Supply) Act, 1948. Among one of the most notable provisions relating to the said piece of legislation was the formation of the Central Electricity Authority (CEA) as an apex authority for technical planning and development. The State Electricity Boards (SEBs) were started off and specified the management for contributing the electricity within the respective state. Besides that, the Electricity Regulatory Commission Act, 1998, is the main cause behind the formation of both commissions.

For rationalization of the electricity rate, the said Act assist efficient and environmentally sound policies, and eventually, for the matters surrounding the regulation of electricity and after that, the Electricity Act, 2003 (other than for nuclear energy, which is governed by the Atomic Energy Act, 1962), became the pillar of energy sector laws. By replacing all the former laws, the Act launched new legislation to direct the needs of the advancing times. Different attempts have been made for the amendment of the Electricity Act, 2003, including the Electricity (Amendment) Bill, 2014, the Draft Electricity Bill, 2018, and the current Electricity (Amendment) Bill, 2020.

There are some regulatory frameworks like the Central Electricity Authority of India, which is the prime organization that advises the state governments on matters of policies and supervisory activities as well as draws up schemes for the progress of the electricity sector. At first it was instituted under Section 3(1) of the Electricity Supply Act, 1948, but after, Section 70(1) of the Electricity Act, 2003 replaced it.

As per section 110 of one of the Electricity Act,2003, the jurisdictional ambit of the appellate tribunal of electricity falls under it. 

Its main function is to hear appeals or actual petitions opposed to the decisions of the adjudicating officer, the central or state regulatory commissions, and the joint commission. The APTEL has accurate jurisdiction to adjudicate petitions along with the authority to direct any appropriate committee to perform its required functions. However, to divert the issues to determine the soundness of regulations, APTEL has no authority provided by the CERC or SERCs. 

A regulatory body under the Electricity Regulatory Commission Act,1988, known as the Central Electricity Commission, was established. It is approved to encourage competition, regulate the rate of central government-owned originating companies, and upgrade the standards of quality, continuity, and reliability of service by licensees, besides various other functions. 

The State Electricity Regulatory Commission was established to decide rates for generation and grant licenses at intrastate levels. Besides tariffs and licensing, the prime duties of SERCs are to control the supply, transmission, and wheeling of electricity, as well as control wholesale, volume, or retail sales of electricity within their respective States. Besides that, SERCs are also permitted to form regulations on all aspects within their jurisdiction and make judgments upon power-related disputes. To control the transference of energy by way of an interstate transmission system, a statutory body, like the Central Transmission Utility, was established. Under Section 39 of the Electricity Act, 2003, the State Transmission Utilities are established, which mainly focus on controlling the transfer of energy through an intrastate transferal system, corresponding with the CTU, State governments, and utility companies. 

Under Section 26 of the Electricity Act, 2003, the NLDC is set up to make sure there is desegregated operation of the power grid for plain transferring of electricity inside the areas and to enable the transnational power transitions over different regions. 

The central government has demarcated the country into regions for the well-organized, low-cost, desegregated transmission and supply of electricity. For the interstate, regional, or interregional generation and transmission of electricity under Section 41 of the 2003 Act, the RLDC also assists interconnection and coordination of facilities. 

Just as the RLDC operates at the territorial level, the SLDCs operate at state levels to make sure integrated operations of the power system in their individual states. 

In short, electricity is provided in India inside the laws and regulations of the Electricity Act, 2003, and the responsibility to harmonize such laws with regulations is on the regulatory commissions of India. 

REFERENCES-

1. Electricity Act,2003

2. Mahendra Pal Singh(ed.), Constitution of India (Eastern Book Company, Lucknow,13 th edn.,2017).

3. The Electricity Commission Act, 1998, available at: https://www.indiacode.nic.in/repealedfileopen?rfilename=A1998-14.pdf (last visited on July 2, 1998).

4. The Electricity Supply Act, 1948, s.3(1).

5. The Electricity Act, 2003, s.70(1).

6. The Electricity Act,2003, s.110.

7.The Electricity Regulatory Commission Act,1988, available at: https://vajiramandravi.com/current-affairs/cerc/ (last visited on February 18, 2024).

8. The Electricity Act, 2003, s.39.

9. The Electricity Act, 2003, s.26.

10. The Electricity Act, 2003, s.41.

This article is authored by Richa Mukherjee, who was among the Top 40 performers in the Constitution Law Quiz Competition organized by Lets Learn Law.