CENTRAL ELECTRICITY AUTHORITY

[Mr. M. GOVINDARAJAN]

Electricity Act

The Central Government enacted ‘The Electricity Act, 2003’ (‘Act’ for short) which is applicable all over India except Jammu and Kashmir.  The objects of the Act is to-

• consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry;
• promoting competition therein;
• protecting the interests of the consumers;
• supply of electricity to all areas;
• rationalization of electricity tariff;
• ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies;
• constitution of Central Electricity Authority, Regulatory Commissions;
• establishment of Appellate Tribunal; and
• matters connected therewith or incidental thereto.

In ‘Tata Power Company Limited V. Reliance Eneregy Limited’ – 2008 (7) TMI 1056 - SUPREME COURT  the Supreme Court held that the provisions of Central Electricity Act, 2003 encourages completion in the electricity trade and is meant to be consumer friendly.   One of the objectives it sets out to achieve is to give the consumer an option to choose the Distribution Licensee from whom it wishes to receive supply of electrical energy.

Central Electricity Authority

Section 70 of the Act provides for the constitution of Central Electricity Authority (‘Authority’ for short).  This section provides that there shall be a body to be called ‘Central Electricity Authority’ to exercise such functions and perform such duties as are assigned to it under this Act.

Members

The Central Electricity Authority established under section 3 of the Electricity (Supply) Act, 1948 shall be the authority for the purposes of the Act.  The Authority shall consist of not more than 14 members, including its Chairperson of whom not more than eight shall be ull time members to be appointed by the Central Government.

Qualification

The Central Government may appoint any person as the Chairperson of the Authority or designate one of the full time Members as the Chairperson of the Authority.  The Members shall be appointed from amongst persons of ability, integrity and standing who have knowledge of, and adequate and capacity in dealing with the problems relating to engineering, finance, commerce, economics or industrial matters.  At least one Member shall be appointed from each of the following categories-

• engineering with specialization in design, construction, operation and maintenance of generating stations;
• engineering with specialization in transmission and supply of electricity;
• applied research in the field of electricity;
• applied economics, accounting, commerce or finance.

Tenure

The Chairperson and all the Members of the Authority shall hold office during the pleasure of the Central Government.

Headquarters

The headquarters of the Authority shall be at Delhi.

Meeting

The Authority shall meet at the head office or any other place at such time as the Chairperson may direct.  The Authority shall observe such rules of procedure in regard to the transaction of business at its meetings, including the quorum at its meetings, as it may specify.

If the Chairperson, or if he is unable to attend a meeting to the Authority, any other Member nominated by the Chairperson in this behalf and in the absence of such nomination or where there is no Chairperson, any Member chosen by the Members present among themselves shall preside at the meeting.

All questions which come up before any meeting of the Authority shall be decided by a majority of votes of the Members present and voting.   In the event of an equality of votes, the Chairperson or the person presiding shall have the right to exercise a second or casting vote.

Proceedings of the Authority

All orders and decisions of the Authority shall be authenticated by the Secretary or any other officer of the Authority duly authorized by the Chairperson in this behalf.  No act or proceeding of the Authority shall be questioned or shall be invalidated merely on the ground of existence of any vacancy in, or any defect in the constitution of the Authority.

Terms and conditions

The Chairperson of the Authority and other full time Members shall receive such salary and allowances as may be determined by the Central Government.  Other Members shall receive such allowances and fees for attending the meetings of the Authority, as the Central Government may prescribe.  The other terms and conditions of service of the Chairperson and Members of the Authority including, subject to the provisions their terms of office shall be such as the Central Government may prescribe.

Members not to have certain interest

Section 71 of the Act provides that no Member of the Authority shall have any share or interest, whether in his own name or otherwise, in any company or other body corporate or an association of persons whether incorporated or not, or a firm engaged in the business of generation, transmission, distribution and trading of electricity or fuel for the generation thereof or in the manufacture of electrical equipment.

Functions of the Authority

The Authority shall perform such functions and duties as the Central Government may prescribe or direct and in particular to-

• advise the Central Government on the matters relating to the national electricity policy, formulate short-term and perspective plans for development of the electricity system and co-ordinate the activities of the planning agencies for the optional utilization of resources to subserve the interests of the national economy and to provide reliable and affordable electricity for all consumers;
• specify the technical standards for construction of electrical plants, electric lines and connectivity to the grid;
• specify the safety requirements for construction operation and maintenance of electrical plants and electric lines;
• specify the Grid standards for operation and maintenance of transmission lines;
• specify the Grid Standards for operation and supply of electricity;
• promote and assist in the timely completion of schemes and projects for improving and augmenting the electricity system;
• promote measures for advancing the skill of persons engaged in the electricity industry;
• advise the Central Government on any matter on which its advice is sought or make recommendation to that Government on any matter if, in the opinion of the Authority, the recommendation would help in improving the generation, transmission, trading, distribution and utilization of electricity;
• collect and record the data concerning the generation, transmission, trading, distribution and utilization of electricity and carry out studies relating to cost, efficiency, competitiveness and such like matters;
• make public from time to time the information secured under this Act, and provide for the publication of reports and investigations;
• promote research in matters affecting the generation, transmission, distribution and trading of electricity;
• carry out, or cause to be carried out, any investigation for the purposes of generating or transmitting or distributing electricity;
• advise any State Government, licensees or the generating companies on such matters which shall enable them to operate and maintain the electricity system under their ownership or control in an improved manner and where necessary, in co-ordination with any other Government, licensee or the generating company owning or having the control of another electricity system;
• advise the Appropriate Government and the Appropriate Commission on all technical matters relating to generation, transmission and distribution of electricity; and
• discharge such other functions as may be provided under the Act.

Statistics

Section 74 provides that it shall be the duty of every licensee, generating company or person generating electricity for its own use to furnish the Authority such statistics, returns or other information relating to generation, transmission, distribution, trading and use of electricity as it may require and at such times and in such form and manner as may be specified by the Authority.

Directions by Central Government

Section 75 provides that in the discharge of its functions, the Authority shall be guided by such directions in matters of policy involving public interest as the Central Government may give it in writing.  If any question arises as to whether any such direction relates to a matter of policy inviting public interest, the decision of the Central Government thereon shall be final.