Electricity Act 2003, National Electricity Policy 2005, Tariff Policy

2006, Rural Electrification Policy 2006, Renewable Power Policies,

Regulations








Llectricity Act 2003

Background (Need for the Act)
CreaLe enough generaLlng capaclLy Lo ouLgrow Lhe slLuaLlon of energy and peaklng shorLages and make
Lhe counLry free of power cuLs wlLh some spare generaLlng capaclLy so LhaL Lhe sysLem ls also rellable.
1he secLor ls Lo be made flnanclally healLhy so LhaL Lhe sLaLe governmenL flnances are noL burdened by
Lhe losses of Lhls secLor.
1he secLor should be able Lo aLLracL funds from Lhe caplLal markeLs wlLhouL governmenL supporL.
rlvaLe secLor should come forward Lo seL up power planLs ln a blg way
lL ls ln Lhls conLexL LhaL Lhe LlecLrlclLy AcL, 2003 seeks Lo brlng abouL a quallLaLlve LransformaLlon of Lhe
elecLrlclLy secLor Lhrough a new paradlgm.
1he AcL seeks Lo creaLe llberal framework of developmenL for Lhe power secLor by dlsLanclng
CovernmenL from regulaLlon.
lL replaces Lhe Lhree exlsLlng leglslaLlons, namely, lndlan LlecLrlclLy AcL, 1910, Lhe LlecLrlclLy (Supply) AcL,
1948 and Lhe LlecLrlclLy 8egulaLory Commlsslons AcL, 1998.
1he AcL came lnLo force wlLh effecL from 10Lh !une 2003.
Objectives of the Act are:
-1o consolldaLe Lhe laws relaLlng Lo generaLlon, Lransmlsslon, dlsLrlbuLlon, Lradlng and use of elecLrlclLy,
-romoLlng compeLlLlon
-roLecLlng lnLeresL of consumers Lhrough creaLlon of lorum for redressal of grlevances
-Supply of elecLrlclLy Lo all areas,
-8aLlonallzaLlon of elecLrlclLy Larlff,
-Lnsurlng LransparenL pollcles regardlng subsldles,
-romoLlon of efflclenL and envlronmenLally benlgn pollcles,
-ConsLlLuLlon of 8egulaLory Commlsslons and esLabllshmenL of AppellaLe 1rlbunal for maLLers connecLed
wlLh power secLor.
(an AppellaLe 1rlbunal for LlecLrlclLy havlng [urlsdlcLlon LhroughouL lndla has been seL up Lo hear appeals
or orlglnal peLlLlons agalnsL Lhe orders of Lhe 1he CenLral 8egulaLory Commlsslon or SLaLe 8egulaLory
Commlsslon eLc and lssue dlrecLlons Lo any ApproprlaLe Commlsslon for Lhe performance of lLs sLaLuLory
funcLlons
Salient features of the Act are:
l. 1he CenLral CovernmenL Lo prepare a naLlonal LlecLrlclLy ollcy and Larlff pollcy ln consulLaLlon
wlLh SLaLe CovernmenLs
ll. CpLlmal uLlllzaLlon of power generaLlon resources of coal, naLural gas, oll, hydro and renewable
energy sources
lll. 1radlng whlch lmplles purchase of power for resale" has been ldenLlfled as an lndependenL and
llcensed acLlvlLy
lv. 1hrusL Lo compleLe Lhe rural elecLrlflcaLlon and provlde for managemenL of rural dlsLrlbuLlon by
anchayaLs, CooperaLlve SocleLles, non-CovernmenL organlsaLlons, franchlsees eLc.
v. rovlslon for llcence free generaLlon and dlsLrlbuLlon ln Lhe rural areas.
vl. CeneraLlon belng dellcensed and capLlve generaLlon belng freely permlLLed. Pydro pro[ecLs
would, however, need clearance from Lhe CenLral LlecLrlclLy AuLhorlLy
1hls ls almed aL enabllng Lhe consumers Lo seLup Lhelr own planLs Lo meeL Lhelr power
requlremenLs
1he acL also enables small lndusLrlal unlLs Lo group LogeLher and seL up capLlve planLs
CapLlve power planLs creaLe compeLlLlon for exlsLlng uLlllLles Lo lmprove Lhelr performance.
vll. rlvaLe secLor parLlclpaLlon ln Lransmlsslon& dlsLrlbuLlon of elecLrlclLy
vlll. Cross subsldy Lo be gradually phased ouL along
lx. LsLabllshmenL of CenLral SLaLe LlecLrlclLy 8egulaLory Commlsslon (CL8C) and SLaLe LlecLrlclLy
8egulaLory Commlsslon (SL8C) for each sLaLe
x. rovlslon for paymenL of subsldy Lhrough budgeL.
xl. rovlslon for reorganlsaLlon or conLlnuance of SL8s.
xll. MeLerlng of all elecLrlclLy supplled made mandaLory.
xlll. An AppellaLe 1rlbunal Lo hear appeals agalnsL Lhe declslon of Lhe CL8C and SL8Cs.
xlv. rovlslons relaLlng Lo LhefL of elecLrlclLy made more sLrlngenL. 8y punlshmenL and flne

Abridged Version Covering Salient Sections in ELECTRICITY ACT 2003

1PL LLLC18lCl1? AC1, 2003 [no.36 of 2003] [26Lh May, 2003]
1hls ls an AcL Lo consolldaLe Lhe laws relaLlng Lo generaLlon, Lransmlsslon, dlsLrlbuLlon, Lradlng
and use of elecLrlclLy and generally for Laklng measures conduclve Lo developmenL of elecLrlclLy
lndusLry, promoLlng compeLlLlon Lhereln, proLecLlng lnLeresL of consumers and supply of
elecLrlclLy Lo all areas, raLlonallzaLlon of elecLrlclLy Larlff, ensurlng LransparenL pollcles regardlng
subsldles, promoLlon of efflclenL and envlronmenLally benlgn pollcles, consLlLuLlon of CenLral
LlecLrlclLy AuLhorlLy, 8egulaLory Commlsslons and esLabllshmenL of AppellaLe 1rlbunal and for
maLLers connecLed LherewlLh or lncldenLal LhereLo.
1hls acL ls publlshed ln xvlll parLs. Lach parL conLalns several secLlons
PART I PRELIMINARY contains definitions of terms used in the document covering
sections 1 and 2
PART II NATIONAL ELECTRICITY POLICY AND PLAN covering sections 3 to 6.
1he CenLral CovernmenL shall, from Llme Lo Llme, prepare Lhe naLlonal LlecLrlclLy ollcy and
Larlff pollcy, ln consulLaLlon wlLh Lhe SLaLe CovernmenLs and Lhe CenLral LlecLrlclLy AuLhorlLy
(CLA) for developmenL of Lhe power sysLem based on opLlmal uLlllsaLlon of resources such as
coal, naLural gas, nuclear, hydro and renewable sources of energy. 1he CenLral CovernmenL
shall publlsh naLlonal LlecLrlclLy ollcy and Larlff pollcy from Llme Lo Llme and also revlew or
revlse Lhem.
Section 3: CLA shall prepare a naLlonal LlecLrlclLy lan ln accordance wlLh Lhe naLlonal
LlecLrlclLy ollcy and noLlfy such plan once ln flve years
Section 4: 1he CenLral CovernmenL shall, afLer consulLaLlon wlLh Lhe SLaLe CovernmenLs,
prepare and noLlfy a naLlonal pollcy, permlLLlng sLand alone sysLems (lncludlng Lhose based on
renewable sources of energy and oLher nonconvenLlonal sources of energy) for rural areas
Section 5: 1he CenLral CovernmenL shall also formulaLe a naLlonal pollcy, ln consulLaLlon wlLh
Lhe SLaLe CovernmenLs and Lhe SLaLe Commlsslons, for rural elecLrlflcaLlon and for bulk
purchase of power and managemenL of local dlsLrlbuLlon ln rural areas Lhrough anchayaL
lnsLlLuLlons, users' assoclaLlons, cooperaLlve socleLles, non-CovernmenLal organlsaLlons or
franchlsees.
Section 6: 1he concerned SLaLe CovernmenL and Lhe CenLral CovernmenL shall [olnLly
endeavour Lo provlde access Lo elecLrlclLy Lo all vlllages l.e rural elecLrlflcaLlon
PART III GENERATION OF ELECTRICITY covering sections 7 to 11
Section 7: Any generaLlng company may esLabllsh, operaLe and malnLaln a generaLlng sLaLlon
wlLhouL obLalnlng a llcence under Lhls AcL lf lL complles wlLh Lhe Lechnlcal sLandards relaLlng Lo
connecLlvlLy wlLh Lhe grld referred Lo ln clause (b) of secLlon 73.
Section 8. (Hydro-electric generation): Any generaLlng company lnLendlng Lo seL-up a
hydro elecLrlc generaLlng sLaLlon shall prepare and submlL Lo Lhe CLA for lLs concurrence, a
scheme esLlmaLed Lo lnvolve a caplLal expendlLure exceedlng such sum, as may be flxed by Lhe
CenLral CovernmenL, from Llme Lo Llme and also havlng besL prospecLs for ulLlmaLe
developmenL of Lhe rlver or lLs LrlbuLarles for mulLlpurpose uses
Section 9. (Captive generation): A person may consLrucL, malnLaln or operaLe a capLlve
generaLlng planL and dedlcaLed Lransmlsslon llnes provlded

(a) LhaL Lhe supply of elecLrlclLy from Lhe capLlve generaLlng planL Lhrough Lhe grld shall be
regulaLed ln Lhe same manner as Lhe generaLlng sLaLlon of a generaLlng company.
(b)LhaL no llcence shall be requlred for supply of elecLrlclLy generaLed from a capLlve generaLlng
planL Lo any llcencee and Lo any consumer sub[ecL Lo Lhe regulaLlons made under subsecLlon
(2) of secLlon 42.]
(c) 1haL person shall have Lhe rlghL Lo open access for Lhe purposes of carrylng elecLrlclLy from
hls capLlve generaLlng planL Lo Lhe desLlnaLlon of hls use sub[ecL Lo avallablllLy of adequaLe
Lransmlsslon faclllLy


PART IV LICENSING covering sections from sections 12 to 24
Section 12. (Authorized persons to transmit, supply, etc., electricity): Cnly an
auLhorlzed person shall LransmlL elecLrlclLy, or dlsLrlbuLe elecLrlclLy, or underLake Lradlng ln
elecLrlclLy,
Section 13. (Power to exempt): 1he ApproprlaLe Commlsslon may under speclal condlLlons
and resLrlcLlons shall noL apply secLlon 12 Lo any local auLhorlLy, anchayaL lnsLlLuLlon, users'
assoclaLlon, co-operaLlve socleLles, non-governmenLal organlzaLlons, or franchlsees:
Section 14. (Grant of licence): 1he ApproprlaLe Commlsslon may on an appllcaLlon granL a
llcence Lo any person for Lransmlsslon dlsLrlbuLlon and Lradlng ln elecLrlclLy
1he ApproprlaLe Commlsslon may granL a llcence Lo Lwo or more persons for dlsLrlbuLlon of
elecLrlclLy Lhrough Lhelr own dlsLrlbuLlon sysLem wlLhln Lhe same area,
1he CenLral 1ransmlsslon uLlllLy or Lhe SLaLe 1ransmlsslon uLlllLy, Lhe uamodar valley
CorporaLlon, CovernmenL Company shall be deemed Lo be a Lransmlsslon llcensee
A person lnLendlng Lo generaLe and dlsLrlbuLe elecLrlclLy ln a rural area shall noL requlre any
llcence for such generaLlon and dlsLrlbuLlon of elecLrlclLy,
Also a dlsLrlbuLlon llcensee shall noL requlre a llcence Lo underLake Lradlng ln elecLrlclLy.
Section 15. (Procedure for grant of licence): 1hls secLlon glves Lhe procedure a person
has Lo follow Lo obLaln a llcense
Section 18. (Amendment of licence): 1hls secLlon lndlcaLes Lhe Lerms and condlLlons and
procedure for amendmenLs ln Lhe llcense
Section 19. (Revocation of licence): 1hls secLlon lndlcaLes Lhe Lerms and condlLlons and
procedure for revoklng ln Lhe llcense
Section 24. (Suspension of distribution licence): 1hls secLlon glves Lhe condlLlons under
whlch a llcense ls suspended
PART V TRANSMISSION OF ELECTRICITY covering sections 25 to 41
Section 25. (Inter-State, regional and inter-regional transmission): lor Lhe purposes
menLloned ln Lhls secLlon, Lhe CenLral CovernmenL may make reglon wlse demarcaLlon of Lhe
counLry and also make modlflcaLlons Lo lL.
Section 26. (National Load Despatch Centre): 1he CenLral CovernmenL Lo esLabllsh a
cenLre aL Lhe naLlonal level, Lo be known as Lhe naLlonal Load uespaLch CenLre (nLuC) for
opLlmum schedullng and despaLch of elecLrlclLy among Lhe 8eglonal Load uespaLch CenLres
(8LuC).

1he nLuC shall noL engage ln Lhe buslness of Lradlng ln elecLrlclLy and shall be operaLed by a
CovernmenL company or auLhorlLy or corporaLlon of Lhe CenLral CovernmenL.
Section 27. (Constitution of RLDC): 1he CenLral CovernmenL shall esLabllsh a cenLre for
each reglon Lo be known as Lhe 8eglonal Load uespaLch CenLre havlng LerrlLorlal [urlsdlcLlon as
deLermlned by Lhe CenLral CovernmenL.
no 8LuC shall engage ln Lhe buslness of generaLlon of elecLrlclLy or Lradlng ln elecLrlclLy.
Section 28. (Functions of Regional Load Despatch Centre): 1he CenLre shall be
responslble for opLlmum schedullng and despaLch of elecLrlclLy wlLhln Lhe reglon, ln accordance
wlLh Lhe conLracLs enLered lnLo wlLh Lhe llcensees or Lhe generaLlng companles operaLlng ln Lhe
reglon, monlLor grld operaLlons, exerclse supervlslon and conLrol over Lhe lnLer-SLaLe
Lransmlsslon sysLem, keep accounLs of quanLlLy of elecLrlclLy LransmlLLed Lhrough Lhe reglonal
grld. 1he dlrecLlons of Lhe 8LuC shall be complled wlLh by Lhe SLaLe Load uespaLch CenLre or
Lhe llcensee or Lhe generaLlng company

Section 30. (Transmission within a State): 1he SLaLe Commlsslon shall faclllLaLe and
promoLe Lransmlsslon, wheellng and lnLer-connecLlon arrangemenLs for Lhe Lransmlsslon and
supply of elecLrlclLy
Section 31. (Constitution of State Load Despatch Centres): 1he SLaLe CovernmenL
shall esLabllsh Lhe SLaLe Load uespaLch CenLre operaLed by a CovernmenL company or any
auLhorlLy or corporaLlon
no SLaLe Load uespaLch CenLre shall engage ln Lhe buslness of Lradlng ln elecLrlclLy.
1he SLaLe Load uespaLch CenLre shall comply wlLh Lhe dlrecLlons of Lhe 8eglonal Load uespaLch
CenLre.
Section 32. (Functions of State Load Despatch Centres): 1he CenLre shall be Lhe apex
body Lo ensure lnLegraLed operaLlon of Lhe power sysLem ln a SLaLe.
1he CenLre shall be responslble for opLlmum schedullng and despaLch of elecLrlclLy wlLhln a
SLaLe, monlLor grld operaLlons, keep accounLs of Lhe quanLlLy of elecLrlclLy LransmlLLed Lhrough
Lhe SLaLe grld.
Section 34. (Grid Standards): Lvery Lransmlsslon llcensee shall comply wlLh such Lechnlcal
sLandards, of operaLlon and malnLenance of Lransmlsslon llnes.
Section 38. (Central Transmission Utility and functions): 1he CenLral CovernmenL may
noLlfy any CovernmenL company as Lhe CenLral 1ransmlsslon uLlllLy (C1u) Lo underLake
Lransmlsslon of elecLrlclLy Lhrough lnLer-SLaLe Lransmlsslon sysLem, C1u shall noL engage ln Lhe
buslness of generaLlon of elecLrlclLy or Lradlng ln elecLrlclLy:
Section 39. (State Transmission Utility and functions):
1he SLaLe CovernmenL may noLlfy Lhe 8oard or a CovernmenL company as Lhe SLaLe
1ransmlsslon uLlllLy Lo underLake Lransmlsslon of elecLrlclLy Lhrough lnLra-SLaLe Lransmlsslon
sysLem.
Section 40. (Duties of transmission licensees): lL shall be Lhe duLy of a Lransmlsslon
llcensee - Lo bulld, malnLaln and operaLe an lnLer-SLaLe or lnLra sLaLe Lransmlsslon sysLem,
comply wlLh Lhe dlrecLlons of Lhe 8eglonal Load uespaLch CenLre and Lhe SLaLe Load uespaLch
CenLre, provlde non-dlscrlmlnaLory open access Lo lLs Lransmlsslon sysLem for use by any
llcensee or generaLlng company on paymenL of Lhe Lransmlsslon charges,
Section 41. (Other business of transmission licensee): A Lransmlsslon llcensee may,
wlLh prlor lnLlmaLlon Lo Lhe ApproprlaLe Commlsslon, engage ln any buslness for opLlmum
uLlllsaLlon of lLs asseLs under some speclflc Lerms and condlLlons
PART VI DISTRIBUTION OF ELELCTRICITY covering sections from 42 to 60
Section 42. (Duties of distribution licensee and open access): lL shall be Lhe duLy of a
dlsLrlbuLlon llcensee Lo develop and malnLaln an efflclenL, co-ordlnaLed and economlcal
dlsLrlbuLlon sysLem ln hls area of supply and Lo supply elecLrlclLy ln accordance wlLh Lhe
provlslons conLalned ln Lhls AcL.
1he SLaLe Commlsslon shall allow open access for wheellng of elecLrlclLy on paymenL of
surcharge
Such surcharge shall noL be levlable ln case open access ls provlded Lo a person who has
esLabllshed a capLlve generaLlng planL for carrylng Lhe elecLrlclLy Lo Lhe desLlnaLlon of hls own
use. Lvery dlsLrlbuLlon llcensee shall esLabllsh a forum for redressal of grlevances of Lhe
consumers
Section 50. (The Electricity Supply Code): 1he SLaLe Commlsslon shall speclfy an
elecLrlclLy supply code Lo provlde for recovery of elecLrlclLy charges, lnLervals for bllllng of
elecLrlclLy charges, dlsconnecLlon of supply of elecLrlclLy for non-paymenL Lhereof, resLoraLlon
of supply of elecLrlclLy, measures for prevenLlng Lamperlng, dlsLress or damage Lo elecLrlcal llne
or meLer.
Section 51. (Other businesses of distribution licensees): A dlsLrlbuLlon llcensee may,
wlLh prlor lnLlmaLlon Lo Lhe ApproprlaLe Commlsslon, engage ln any oLher buslness for
opLlmum uLlllzaLlon of lLs asseLs under some speclflc Lerms and condlLlons.

Section 56. (Disconnection of supply in default of payment): 1hls secLlon lndlcaLes
Lhe procedure for such a dlsconnecLlon.
Section 57. (Standards of performance of licensee): 1he ApproprlaLe Commlsslon may,
speclfy sLandards of performance of a llcensee
PART-VII TARIFF covering sections 61 to 66
Section 61. (Tariff regulations): 1he ApproprlaLe Commlsslon shall speclfy Lhe Lerms and
condlLlons for Lhe deLermlnaLlon of Larlff, gulded by Lhe prlnclples namely:-
(a) generaLlon, Lransmlsslon, dlsLrlbuLlon and supply of elecLrlclLy are conducLed on commerclal
prlnclples,
(b) encourage compeLlLlon, efflclency, economlcal use of Lhe resources, good performance and
opLlmum lnvesLmenLs,
(c) safeguardlng of consumers' lnLeresL and aL Lhe same Llme, recovery of Lhe cosL of elecLrlclLy
ln a reasonable manner,
(d) rewardlng efflclency ln performance,
(e) promoLlon of co-generaLlon and generaLlon of elecLrlclLy from renewable sources of energy,
(f) Lhe naLlonal LlecLrlclLy ollcy and Larlff pollcy:
Section 62. (Determination of tariff): 1he ApproprlaLe Commlsslon shall deLermlne Lhe
Larlff for (a) supply of elecLrlclLy by a generaLlng company Lo a dlsLrlbuLlon llcensee: (b)
Lransmlsslon of elecLrlclLy ,(c) wheellng of elecLrlclLy, (d) reLall sale of elecLrlclLy:
Section 63. (Determination of tariff by bidding process): 1hls secLlon glves Lhe
procedure for blddlng
Section 65. (Provision of subsidy by State Government): lf Lhe SLaLe CovernmenL
requlres Lhe granL of any subsldy Lo any consumer or class of consumers ln Lhe Larlff
deLermlned by Lhe SLaLe Commlsslon, Lhe SLaLe CovernmenL shall pay ln advance Lhe amounL
Lo compensaLe Lhe person affecLed (dlsLrlbuLlon llcensee)
PART VIII WORKS (provisions for works to be carried out for laying electric lines)
covering sections 67 to 69
Section 67. (Provisions as to opening up of streets, sewer lines, railways, etc): 1he
condlLlons and procedure for carrylng ouL such works for laylng elecLrlc llnes are glven
Section 68. (rovlslons relaLlng Lo lylng of Cverhead llnes):
PART IX CENTRAL ELECTRICITY AUTHORITY (Constitution and functions of
Authority) covering sections 70 to 75
Section 70. (Constitution, etc., of Central Electricity Authority): 1he CenLral LlecLrlclLy
AuLhorlLy, esLabllshed under secLlon 3 of Lhe LlecLrlclLy (Supply) AcL, 1948 conLlnue Lo funcLlon
under Lhe elecLrlclLy acL 2003
1he AuLhorlLy shall conslsL of noL more Lhan fourLeen Members (lncludlng lLs Chalrperson) of
whom noL more Lhan elghL shall be full-Llme Members Lo be appolnLed by Lhe CenLral
CovernmenL.

1he Chalrperson shall be Lhe Chlef LxecuLlve of Lhe CLA. 1he headquarLers of Lhe AuLhorlLy
shall be aL uelhl.
Section 73. (Functions and duties ofCEA):
(a) advlse Lhe CenLral CovernmenL on Lhe maLLers relaLlng Lo Lhe naLlonal elecLrlclLy pollcy,
formulaLe shorL-Lerm and perspecLlve plans for developmenL of Lhe elecLrlclLy sysLem
(b) speclfy Lhe Lechnlcal sLandards for consLrucLlon of elecLrlcal planLs, elecLrlc llnes and
connecLlvlLy Lo Lhe grld,
(c)speclfy Lhe safeLy requlremenLs for consLrucLlon, operaLlon and malnLenance of elecLrlcal
planLs and elecLrlc llnes,
(d) speclfy Lhe Crld SLandards for operaLlon and malnLenance of Lransmlsslon llnes,
(e) speclfy Lhe condlLlons for lnsLallaLlon of meLers for Lransmlsslon and supply of elecLrlclLy,
(g) advlse Lhe ApproprlaLe CovernmenL and Lhe ApproprlaLe Commlsslon on all Lechnlcal
maLLers relaLlng Lo generaLlon, Lransmlsslon and dlsLrlbuLlon of elecLrlclLy,
Section 75. (Directions by Central Government to Authority): Lhe AuLhorlLy shall be
gulded by dlrecLlons from Lhe CenLral CovernmenL ln maLLers of pollcy lnvolvlng publlc lnLeresL
PART X REGULATORY COMMISSIONS (Constitution, powers and functions of Central
Commission) covering sections 76 to 109
Section 76. (Constitution of Central Commission): 1he CenLral LlecLrlclLy 8egulaLory
Commlsslon, esLabllshed under secLlon 3 of Lhe LlecLrlclLy 8egulaLory Commlsslons AcL, 1998
conLlnues Lo funcLlon under Lhls acL
1he CenLral Commlsslon shall conslsL of a Chalrperson and Lhree oLher Members, Lhe
Chalrperson of Lhe CLA shall be Lhe Member, exofflclo. 1he Chalrperson and Members of Lhe
CenLral Commlsslon shall be appolnLed by Lhe CenLral CovernmenL
Section 79. (Functions of Central Commission):
(a) Lo regulaLe Lhe Larlff of generaLlng companles owned or conLrolled by Lhe CenLral
CovernmenL,
(b) Lo regulaLe Lhe lnLer-SLaLe Lransmlsslon of elecLrlclLy , and also Lo deLermlne Larlff
(c) Lo lssue llcenses Lo persons Lo funcLlon as Lransmlsslon llcensee and elecLrlclLy Lrader wlLh
respecL Lo Lhelr lnLer-SLaLe operaLlons,
(d) Lo ad[udlcaLe upon dlspuLes lnvolvlng generaLlng companles or Lransmlsslon llcensee
(e) Lo levy fees for Lhe purposes of Lhls AcL,
(f) Lo speclfy Crld Code havlng regard Lo Crld SLandards,
(g) Lo speclfy and enforce Lhe sLandards wlLh respecL Lo quallLy, conLlnulLy and rellablllLy of
servlce by llcensees,

(h) Lo flx Lhe Lradlng margln ln Lhe lnLer-SLaLe Lradlng of elecLrlclLy, lf consldered, necessary,
(l) advlse Lhe CenLral CovernmenL on formulaLlon of naLlonal elecLrlclLy ollcy and Larlff pollcy,
promoLlon of compeLlLlon, efflclency and lnvesLmenL ln elecLrlclLy lndusLry,
ln dlscharge of lLs funcLlons, Lhe CenLral Commlsslon shall be gulded by Lhe naLlonal LlecLrlclLy
ollcy, naLlonal LlecLrlclLy lan and Larlff pollcy
Section 80 & 81 (Central Advisory Committee): 1he CenLral Commlsslon May appolnL a
CommlLLee Lo be known as Lhe CenLral Advlsory CommlLLee Lo advlse Lhe CenLral Commlsslon
on ma[or quesLlons of pollcy, quallLy and servlce provlded by Lhe llcensees, proLecLlon of
consumer lnLeresL, elecLrlclLy supply and overall sLandards of performance by uLlllLles.
Section 82. (Constitution of State Commission): Lvery SLaLe CovernmenL shall,
consLlLuLe for Lhe purposes of Lhls AcL, a Commlsslon for Lhe SLaLe Lo be known as Lhe (name of
Lhe SLaLe) LlecLrlclLy 8egulaLory Commlsslon:
1he SLaLe LlecLrlclLy 8egulaLory Commlsslon, esLabllshed by a SLaLe CovernmenL under secLlon
17 of Lhe LlecLrlclLy 8egulaLory Commlsslons AcL, 1998 shall conLlnue under Lhls acL
1he SLaLe Commlsslon shall conslsL of noL more Lhan Lhree Members, lncludlng Lhe Chalrperson
appolnLed by Lhe SLaLe CovernmenL
Section 83. (Joint Commission): a !olnL Commlsslon may be consLlLuLed by an agreemenL
Lo be enLered lnLo - (a) by Lwo or more CovernmenLs of SLaLes, or (b) by Lhe CenLral
CovernmenL, ln respecL of one or more unlon LerrlLorles, and one or more CovernmenLs of
SLaLes,
1he !olnL Commlsslon, consLlLuLed under secLlon 21 A of LlecLrlclLy 8egulaLory Commlsslons
AcL, 1998 shall conLlnue under Lhls acL
1he !olnL Commlsslon shall conslsL of 1 Member from each of Lhe parLlclpaLlng SLaLes and
unlon 1errlLorles and Lhe Chalrperson shall be appolnLed from amongsL Lhe Members by
consensus, falllng whlch by roLaLlon.
1he !olnL Commlsslon shall deLermlne Larlff ln respecL of Lhe parLlclpaLlng SLaLes or unlon
1errlLorles separaLely and lndependenLly.
Section 86. (Functions of State Commission):
(a)deLermlne Lhe Larlff for generaLlon, supply, Lransmlsslon and wheellng of elecLrlclLy,
wholesale, bulk or reLall, as Lhe case may be, wlLhln Lhe SLaLe
(b) regulaLe elecLrlclLy purchase and procuremenL process of dlsLrlbuLlon llcensees lncludlng Lhe
prlce aL whlch elecLrlclLy shall be procured from Lhe generaLlng companles or llcensees for
dlsLrlbuLlon and supply wlLhln Lhe SLaLe,
(c) faclllLaLe lnLra-SLaLe Lransmlsslon and wheellng of elecLrlclLy,
(d) lssue llcences Lo persons seeklng Lo acL as Lransmlsslon llcensees, dlsLrlbuLlon llcensees and
elecLrlclLy Lraders wlLh respecL Lo Lhelr operaLlons wlLhln Lhe SLaLe,
(e) promoLe co-generaLlon and generaLlon of elecLrlclLy from renewable sources of energy
(f) ad[udlcaLe upon Lhe dlspuLes beLween Lhe llcensees, and generaLlng companles
(g) speclfy SLaLe Crld Code and speclfy or enforce sLandards wlLh respecL Lo quallLy, conLlnulLy
and rellablllLy of servlce by llcensees.
1he SLaLe Commlsslon shall advlse Lhe SLaLe CovernmenL on promoLlon of Lhe elecLrlclLy
lndusLry, and reorganlzaLlon and resLrucLurlng of elecLrlclLy lndusLry ln Lhe SLaLe.
Section 87. (State Advisory Committee): 1he SLaLe Commlsslon may esLabllsh a
CommlLLee Lo be known as Lhe SLaLe Advlsory CommlLLee Lo advlse Lhe Commlsslon on pollcy,
servlces provlded by Lhe llcensees, and proLecLlon of consumer lnLeresL.
PART XI APPELLATE TRIBUNAL FOR ELECTIRICITY covering sections from 110 to
125
Section 110. (Establishment of Appellate Tribunal): 1he CenLral CovernmenL shall
esLabllsh an AppellaLe 1rlbunal Lo be known as Lhe AppellaLe 1rlbunal for LlecLrlclLy Lo hear
appeals agalnsL Lhe orders of Lhe ad[udlcaLlng offlcer or Lhe ApproprlaLe Commlsslon under Lhls
AcL.

Section 111. (Appeal to Appellate Tribunal): Any person aggrleved by an order made by
an ad[udlcaLlng offlcer under Lhls AcL (excepL under secLlon 127) can appeal Lo Lhe AppellaLe
1rlbunal for LlecLrlclLy:
Any person appeallng agalnsL Lhe order of Lhe ad[udlcaLlng offlcer levylng any penalLy shall,
whlle flllng Lhe appeal, deposlL Lhe amounL of such penalLy or lL can be waved under speclal
condlLlons
Section 112. (Composition of Appellate Tribunal): 1he AppellaLe 1rlbunal shall conslsL
of a Chalrperson and Lhree oLher Members. 1he Chalrperson of Lhe AppellaLe 1rlbunal shall be
appolnLed by Lhe CenLral CovernmenL afLer consulLaLlon wlLh Lhe Chlef !usLlce of lndla. 1he
Members shall be appolnLed by Lhe CenLral CovernmenL on Lhe recommendaLlon of Lhe
SelecLlon CommlLLee
Section 120. (Procedure and powers of Appellate Tribunal): 1he AppellaLe 1rlbunal
shall have Lhe same powers as are vesLed ln a clvll courL
Section 125. (Appeal Lo Supreme CourL): Any person aggrleved by any declslon or order of Lhe
AppellaLe 1rlbunal may flle an appeal Lo Lhe Supreme CourL




PART XII INVESTIGATION AND ENFORCEMENT (unauthorized use of electricity)
covering sections from 126 to 130

Section 126: (Assessment): --- lf on an lnspecLlon Lhe assesslng offlcer comes Lo Lhe
concluslon LhaL a person ls lndulglng ln unauLhorlzed use of elecLrlclLy, he shall provlslonally
assess Lhe elecLrlclLy charges payable by such person and served upon hlm
Section 127. (Appeal to Appellate Authority): Any person aggrleved by Lhe flnal order
made under secLlon 126 may appeal Lo an appellaLe auLhorlLy. 1he [udgemenL of Lhe appellaLe
auLhorlLy shall be flnal
Section 128. (Investigation of certain matters): 1he ApproprlaLe Commlsslon may, on
belng saLlsfled LhaL a llcensee or a generaLlng company has falled Lo comply wlLh any of Lhe
provlslons of Lhls AcL or rules or regulaLlons may , dlrecL lnvesLlgaLlng AuLhorlLy" Lo lnvesLlgaLe
and reporL Lo LhaL Commlsslon
Section 129. (Orders for securing compliance): Where Lhe ApproprlaLe Commlsslon, on
Lhe basls of lnvesLlgaLlons, ls saLlsfled LhaL a llcensee or Lhe generaLlng company has
conLravened or ls llkely Lo conLravene any of Lhe provlslons of Lhls AcL, lL shall, dlrecL Lhem for
securlng compllance.
PART XIII REORGANISATION OF STATE ELECTRICITY BOARD covering sections
from 131 to 134

Section 131. (Vesting of property of Board in State Government): WlLh effecL from
Lhe daLe Lhe SLaLe CovernmenL decldes Lo lmplemenL Lhe reorganlzaLlon of 8oard any properLy,
lnLeresL ln properLy, rlghLs and llablllLles whlch lmmedlaLely before Lhe effecLlve daLe belonged
Lo Lhe SLaLe LlecLrlclLy 8oard shall vesL ln Lhe SLaLe CovernmenL
Section 132. (Use of proceeds of sale or transfer of Board, etc.): ln Lhe evenL LhaL a
8oard ls sold or Lransferred, Lhe proceeds shall be uLlllzed ln prlorlLy ln Lhe followlng order,
namely :-
(a)paymenL of dues (lncludlng reLlremenL beneflLs due) Lo Lhe offlcers and employees of such
8oard
(b) paymenL of debL or oLher llablllLles of Lhe Lransferor as may be requlred by Lhe exlsLlng loan
covenanLs.
Section 133. (Provisions relating to officers and employees): 1he SLaLe CovernmenL
may, by a Lransfer scheme, provlde for Lhe Lransfer of Lhe offlcers and employees Lo Lhe
Lransferee on Lhe vesLlng of properLles, rlghLs and llablllLles ln such Lransferee as provlded
under secLlon 131.

Section 134. (Payment of compensation or damages on transfer): Lhe Lransfer of Lhe
employmenL of Lhe offlcers and employees referred Lo ln secLlon 133 shall noL enLlLle such
offlcers and employees Lo any compensaLlon or damages
PART XIV OFFENCES AND PENALTIES covering sections 135 to 152
Section 135. (Theft of Electricity): 1hefL means dlshonesLly Lapplng elecLrlclLy, Lamperlng a
meLer, lnsLalllng or uslng a Lampered meLer and damages or desLroylng a meLer eLc.
1he llcensee or suppller, as Lhe case may be, may, upon deLecLlon of such LhefL of elecLrlclLy,
lmmedlaLely dlsconnecL Lhe supply of elecLrlclLy:
1hls secLlon prescrlbes flne Lo be lmposed dependlng on Lhe connecLed load (< 10 kW or > 10
kW)
lor example when Lhe connecLed load does noL exceed 10 kllowaLL, Lhe flne lmposed on flrsL
convlcLlon shall noL be less Lhan Lhree Llmes Lhe flnanclal galn on accounL of such LhefL of
elecLrlclLy and ln Lhe evenL of second or subsequenL convlcLlon Lhe flne lmposed shall noL be
less Lhan slx Llmes buL when Lhe connecLed load exceeds 10 kW, Lhere ls lmprlsonmenL for Lhe
second offence and furLher offences Lhe person ls debarred from geLLlng an elecLrlcal
connecLlon.
Section 136. (Theft of electric lines and materials):
A person commlLLed an offence of LhefL of elecLrlc llnes and maLerlals, shall be punlshable wlLh
lmprlsonmenL for a Lerm whlch may exLend Lo Lhree years or wlLh flne or wlLh boLh and for
furLher offences a person can be lmprlsoned upLo flve years and shall also be llable Lo flne
whlch shall noL be less Lhan Len Lhousand rupees.
Section 140. (Penalty for intentionally injuring electric works): Whoever, wlLh lnLenL
Lo cuL off Lhe supply of elecLrlclLy, cuLs or ln[ures any elecLrlc supply llne or works shall be
punlshable wlLh flne whlch may exLend Lo Len Lhousand rupees.
Section 141. (Extinguishing public lamps):
Whoever, mallclously exLlngulshes any publlc lamp shall be punlshable wlLh flne whlch may
exLend Lo Lwo Lhousand rupees.
Section 145. (Clvll courLs noL Lo have [urlsdlcLlon and no ln[uncLlon shall be granLed by any
courL ln respecL of any acLlon Laken under Lhe elecLrlclLy acL):
Section 152. (Compounding/ compromising of offences): 1he amounLs Lo be pald for
Lhls purpose are:
lndusLrlal Servlce LwenLy Lhousand rupees,
Commerclal Servlce Len Lhousand rupees,
AgrlculLural Servlce Lwo Lhousand rupees,
CLher Servlces four Lhousand rupees:
1he Compoundlng of an offence shall be allowed only once for any person or consumer.
PART XV SPECAIL COURTS covering sections from 153 to 157
Section 153. (Constitution of Special Courts): 1he SLaLe CovernmenL may, for Lhe
purposes of provldlng speedy Lrlal of offences may consLlLuLe Speclal CourLs
Section 154 & 155 (Powers of special court)
Section 157. (Review): 1he Speclal CourL may on a peLlLlon or oLherwlse and ln order Lo
prevenL mlscarrlage of [usLlce, revlew lLs [udgmenL or order passed.
PART XVI DISPUTE RESOLUTION Arbitration
Section 158. (Arbitration):
Where any maLLer ls, by or under Lhls AcL, dlrecLed Lo be deLermlned by arblLraLlon, Lhe
ApproprlaLe Commlsslon may nomlnaLe Lhe arblLraLlon
PART XVII OTHER PROVISIONS (Protective Clauses) covering sections 159 to 165
Section 159. (Protection of railways, highways, airports and canals, docks, wharfs
and piers): no person shall, ln Lhe generaLlon, Lransmlsslon, dlsLrlbuLlon, supply or use of
elecLrlclLy, ln any way ln[ure any rallway, hlghway, alrporLs, Lramway, canal or waLer-way or any
dock, eLc.
Section 160. (Protection of telegraphic, telephonic and electric signalling lines):
Lvery person generaLlng, LransmlLLlng, dlsLrlbuLlng, supplylng or uslng elecLrlclLy shall Lake all
reasonable precauLlons ln consLrucLlng, lylng down and placlng hls elecLrlc llnes, elecLrlcal planL
and oLher works ln proLecLlng Lelegraphlc, Lelephone or elecLrlc slgnallng communlcaLlon llne
eLc. Where a person makes defaulL ln complylng wlLh Lhe requlremenLs of Lhese secLlons, he
shall make full compensaLlon for any loss or damage lncurred
PART XVIII MISCELLANEOUS covering sections 166 to 185
Section 166. (Coordination Forum): 1he CenLral CovernmenL shall consLlLuLe a
coordlnaLlon forum for smooLh and coordlnaLed developmenL of Lhe power sysLem ln Lhe
counLry.
1he CenLral CovernmenL shall also consLlLuLe a forum of regulaLors
1he SLaLe CovernmenL shall consLlLuLe a CoordlnaLlon lorum
1here shall be a commlLLee ln each dlsLrlcL

Section 167. (LxempLlon of elecLrlc llnes or elecLrlcal planLs from aLLachmenL ln cerLaln cases):
Section 168. (Protection of action taken in good faith):
no sulL, prosecuLlon or oLher proceedlng shall lle agalnsL Lhe ApproprlaLe CovernmenL or
AppellaLe 1rlbunal or Lhe ApproprlaLe Commlsslon eLc for anyLhlng done ln good falLh.

Section 170. (Recovery of penalty payable under this Act): Any penalLy payable by a
person under Lhls AcL, lf noL pald, may be recovered as lf lL were an arrear of land revenue.
Section 176. (Power of Central Government to make rules): 1he CenLral CovernmenL
may make rules for carrylng ouL Lhe provlslons of Lhls AcL.
Section 178. (Powers of Central Commission to make regulations): 1he CenLral
Commlsslon may make regulaLlons conslsLenL wlLh Lhls AcL and Lhe rules generally Lo carry ouL
Lhe provlslons of Lhls AcL.
Section 180. (Powers of State Governments to make rules): 1he SLaLe CovernmenL
may make rules for carrylng ouL Lhe provlslons of Lhls AcL.
Section 181. (Powers of State Commissions to make regulations): 1he SLaLe
Commlsslons may make regulaLlons conslsLenL wlLh Lhls AcL and Lhe rules generally Lo carry ouL
Lhe provlslons of Lhls AcL.
Section 184. (Provisions of the Act not to apply in certain cases): 1he provlslons of
Lhls AcL shall noL apply Lo Lhe MlnlsLry or ueparLmenL of Lhe CenLral CovernmenL deallng wlLh
uefence, ALomlc Lnergy.
Section 185. (Repeal and saving): Save as oLherwlse provlded ln Lhls AcL, Lhe lndlan
LlecLrlclLy AcL, 1910, Lhe LlecLrlclLy (Supply) AcL, 1948 and Lhe LlecLrlclLy 8egulaLory
Commlsslons AcL, 1998 are hereby repealed.








National Llectricity Policy 200S


1.0 IN1kCDUC1ICN
1.1 ln compllance wlLh secLlon 3 of Lhe LlecLrlclLy AcL 2003 Lhe CenLral CovernmenL hereby
noLlfles Lhe naLlonal LlecLrlclLy ollcy.
1.2 LlecLrlclLy ls an essenLlal requlremenL for all faceLs of our llfe. lL has been recognlzed as a
baslc human need. lL ls a crlLlcal lnfrasLrucLure on whlch Lhe soclo-economlc developmenL of
Lhe counLry depends. Supply of elecLrlclLy aL reasonable raLe Lo rural lndla ls essenLlal for lLs
overall developmenL. Lqually lmporLanL ls avallablllLy of rellable and quallLy power aL
compeLlLlve raLes Lo lndlan lndusLry Lo make lL globally compeLlLlve and Lo enable lL Lo explolL
Lhe Lremendous poLenLlal of employmenL generaLlon. Servlces secLor has made slgnlflcanL
conLrlbuLlon Lo Lhe growLh of our economy. AvallablllLy of quallLy supply of elecLrlclLy ls very
cruclal Lo susLalned growLh of Lhls segmenL.
1.3 8ecognlzlng LhaL elecLrlclLy ls one of Lhe key drlvers for rapld economlc growLh and poverLy
allevlaLlon, Lhe naLlon has seL lLself Lhe LargeL of provldlng access Lo all households ln nexL flve
years. As per Census 2001, abouL 44 of Lhe households do noL have access Lo elecLrlclLy.
Pence meeLlng Lhe LargeL of provldlng unlversal access ls a daunLlng Lask requlrlng slgnlflcanL
addlLlon Lo generaLlon capaclLy and expanslon of Lhe Lransmlsslon and dlsLrlbuLlon neLwork.
1.4 lndlan ower secLor ls wlLnesslng ma[or changes. CrowLh of ower SecLor ln lndla slnce lLs
lndependence has been noLeworLhy. Powever, Lhe demand for power has been ouLsLrlpplng
Lhe growLh of avallablllLy. SubsLanLlal peak and energy shorLages prevall ln Lhe counLry. 1hls ls
due Lo lnadequacles ln generaLlon, Lransmlsslon & dlsLrlbuLlon as well as lnefflclenL use of
elecLrlclLy. very hlgh level of Lechnlcal and commerclal losses and lack of commerclal approach
ln managemenL of uLlllLles has led Lo unsusLalnable flnanclal operaLlons. Cross-subsldles have
rlsen Lo unsusLalnable levels. lnadequacles ln dlsLrlbuLlon neLworks has been one of Lhe ma[or
reasons for poor quallLy of supply.
1.3 LlecLrlclLy lndusLry ls caplLal-lnLenslve havlng long gesLaLlon perlod. 8esources of power
generaLlon are unevenly dlspersed across Lhe counLry. LlecLrlclLy ls a commodlLy LhaL can noL
be sLored ln Lhe grld where demand and supply have Lo be conLlnuously balanced. 1he wldely
dlsLrlbuLed and rapldly lncreaslng demand requlremenLs of Lhe counLry need Lo be meL ln an
opLlmum manner.
1.6 LlecLrlclLy AcL, 2003 provldes an enabllng framework for acceleraLed and more efflclenL
developmenL of Lhe power secLor. 1he AcL seeks Lo encourage compeLlLlon wlLh approprlaLe
regulaLory lnLervenLlon. CompeLlLlon ls expecLed Lo yleld efflclency galns and ln Lurn resulL ln
avallablllLy of quallLy supply of elecLrlclLy Lo consumers aL compeLlLlve raLes.
1.7 SecLlon 3 (1) of Lhe LlecLrlclLy AcL 2003 requlres Lhe CenLral CovernmenL Lo formulaLe, lnLer
alla, Lhe naLlonal LlecLrlclLy ollcy ln consulLaLlon wlLh CenLral LlecLrlclLy AuLhorlLy (CLA) and
SLaLe CovernmenLs. 1he provlslon ls quoLed below:
"1he CenLral CovernmenL shall, from Llme Lo Llme, prepare Lhe naLlonal LlecLrlclLy ollcy and
Larlff pollcy, ln consulLaLlon wlLh Lhe SLaLe CovernmenLs and Lhe AuLhorlLy for developmenL of
Lhe power sysLem based on opLlmal uLlllzaLlon of resources such as coal, naLural gas, nuclear
subsLances or maLerlals, hydro and renewable sources of energy".
SecLlon 3 (3) of Lhe AcL enables Lhe CenLral CovernmenL Lo revlew or revlse Lhe naLlonal
LlecLrlclLy ollcy from Llme Lo Llme.
1.8 1he naLlonal LlecLrlclLy ollcy alms aL laylng guldellnes for acceleraLed developmenL of Lhe
power secLor, provldlng supply of elecLrlclLy Lo all areas and proLecLlng lnLeresLs of consumers
and oLher sLakeholders keeplng ln vlew avallablllLy of energy resources, Lechnology avallable Lo
explolL Lhese resources, economlcs of generaLlon uslng dlfferenL resources, and energy securlLy
lssues.
1.9 1he naLlonal LlecLrlclLy ollcy has been evolved ln consulLaLlon wlLh and Laklng lnLo accounL
vlews of Lhe SLaLe CovernmenLs, CenLral LlecLrlclLy AuLhorlLy (CLA), CenLral LlecLrlclLy
8egulaLory Commlsslon (CL8C) and oLher sLakeholders.
2.0 AIMS & C8ILC1IVLS
1he naLlonal LlecLrlclLy ollcy alms aL achlevlng Lhe followlng ob[ecLlves:
Access Lo LlecLrlclLy - Avallable for all households ln nexL flve years
AvallablllLy of ower - uemand Lo be fully meL by 2012. Lnergy and peaklng shorLages Lo
be overcome and adequaLe splnnlng reserve Lo be avallable.
Supply of 8ellable and CuallLy ower of speclfled sLandards ln an efflclenL manner and
aL reasonable raLes.
er caplLa avallablllLy of elecLrlclLy Lo be lncreased Lo over 1000 unlLs by 2012.
Mlnlmum llfellne consumpLlon of 1 unlL/household/day as a merlL good by year 2012.
llnanclal 1urnaround and Commerclal vlablllLy of LlecLrlclLy SecLor.
roLecLlon of consumers' lnLeresLs.
3. NA1ICNAL LLLC1kICI1 LAN
3.1 AssessmenL of demand ls an lmporLanL pre-requlslLe for plannlng capaclLy addlLlon. SecLlon
3 (4) of Lhe AcL requlres Lhe CenLral LlecLrlclLy AuLhorlLy (CLA) Lo frame a naLlonal LlecLrlclLy
lan once ln flve years and revlse Lhe same from Llme Lo Llme ln accordance wlLh Lhe naLlonal
LlecLrlclLy ollcy. Also, secLlon 73 (a) provldes LhaL formulaLlon of shorL-Lerm and perspecLlve
plans for developmenL of Lhe elecLrlclLy sysLem and coordlnaLlng Lhe acLlvlLles of varlous
plannlng agencles for Lhe opLlmal uLlllzaLlon of resources Lo subserve Lhe lnLeresLs of Lhe
naLlonal economy shall be one of Lhe funcLlons of Lhe CLA. 1he lan prepared by CLA and
approved by Lhe CenLral CovernmenL can be used by prospecLlve generaLlng companles,
Lransmlsslon uLlllLles and Lransmlsslon/dlsLrlbuLlon llcensees as reference documenL.
3.2 Accordlngly, Lhe CLA shall prepare shorL-Lerm and perspecLlve plan. 1he naLlonal LlecLrlclLy
lan would be for a shorL-Lerm framework of flve years whlle glvlng a 13 year perspecLlve and
would lnclude:
ShorL-Lerm and long Lerm demand forecasL for dlfferenL reglons,
SuggesLed areas/locaLlons for capaclLy addlLlons ln generaLlon and Lransmlsslon keeplng
ln vlew Lhe economlcs of generaLlon and Lransmlsslon, losses ln Lhe sysLem, load cenLre
requlremenLs, grld sLablllLy, securlLy of supply, quallLy of power lncludlng volLage proflle
eLc. and envlronmenLal conslderaLlons lncludlng rehablllLaLlon and reseLLlemenL,
lnLegraLlon of such posslble locaLlons wlLh Lransmlsslon sysLem and developmenL of
naLlonal grld lncludlng Lype of Lransmlsslon sysLems and requlremenL of redundancles,
and
ulfferenL Lechnologles avallable for efflclenL generaLlon, Lransmlsslon and dlsLrlbuLlon.
luel cholces based on economy, energy securlLy and envlronmenLal conslderaLlons.
3.3 Whlle evolvlng Lhe naLlonal LlecLrlclLy lan, CLA wlll consulL all Lhe sLakeholders lncludlng
sLaLe governmenLs. ro[ecLlons made by dlsLrlbuLlon uLlllLles would be glven due welghLage.
CLA wlll also lnLeracL wlLh lnsLlLuLlons and agencles ro[ecLed growLh raLes for dlfferenL secLors
of Lhe economy wlll also be Laken lnLo accounL ln Lhe exerclse of demand forecasLlng.
4.0 ISSULS ADDkLSSLD
1he pollcy seeks Lo address Lhe followlng lssues:
8ural LlecLrlflcaLlon
CeneraLlon
1ransmlsslon
ulsLrlbuLlon
8ecovery of CosL of servlces & 1argeLLed Subsldles.
1echnology uevelopmenL and 8esearch and uevelopmenL (8&u)
CompeLlLlon almed aL Consumer 8eneflLs
llnanclng ower SecLor rogrammes lncludlng rlvaLe SecLor arLlclpaLlon.
Lnergy ConservaLlon
LnvlronmenLal lssues
1ralnlng and Puman 8esource uevelopmenL
CogeneraLlon and non-ConvenLlonal Lnergy Sources
roLecLlon of Consumer lnLeresLs and CuallLy SLandards
S.1 kUkAL LLLC1kIIICA1ICN
3.1.1 1he key developmenL ob[ecLlve of Lhe power secLor ls supply of elecLrlclLy Lo all areas
lncludlng rural areas as mandaLed ln secLlon 6 of Lhe LlecLrlclLy AcL. 8oLh Lhe cenLral
governmenL and sLaLe governmenLs would [olnLly endeavour Lo achleve Lhls ob[ecLlve aL Lhe
earllesL. ueLermlned efforLs should be made Lo ensure LhaL Lhe Lask of rural elecLrlflcaLlon for
securlng elecLrlclLy access Lo all households and also ensurlng LhaL elecLrlclLy reaches poor and
marglnal secLlons of Lhe socleLy aL reasonable raLes ls compleLed wlLhln Lhe nexL flve years.
3.1.2 8ellable rural elecLrlflcaLlon sysLem wlll alm aL creaLlng Lhe followlng:
(a) 8ural LlecLrlflcaLlon ulsLrlbuLlon 8ackbone (8Lu8) wlLh aL leasL one 33/11 kv (or 66/11 kv)
subsLaLlon ln every 8lock and more lf requlred as per load, neLworked and connecLed
approprlaLely Lo Lhe sLaLe Lransmlsslon sysLem
(b) LmanaLlng from 8Lu8 would be supply feeders and one dlsLrlbuLlon Lransformer aL leasL ln
every vlllage seLLlemenL.
(c) Pousehold LlecLrlflcaLlon from dlsLrlbuLlon Lransformer Lo connecL every household on
demand.
(d) Wherever above ls noL feaslble decenLrallzed dlsLrlbuLed generaLlon faclllLles LogeLher wlLh
local dlsLrlbuLlon neLwork would be provlded so LhaL every household geLs access Lo elecLrlclLy.
1hls would be done elLher Lhrough convenLlonal or non-convenLlonal meLhods of elecLrlclLy
generaLlon
(e) uevelopmenL of lnfrasLrucLure would also caLer for requlremenL of agrlculLure & oLher
economlc acLlvlLles lncludlng lrrlgaLlon pump seLs, small and medlum lndusLrles, khadl and
vlllage lndusLrles, cold chaln and soclal servlces llke healLh and educaLlon.
3.1.3 arLlcular aLLenLlon would be glven ln household elecLrlflcaLlon Lo dallL basLls, Lrlbal areas
and oLher weaker secLlons.
3.1.4 8ural LlecLrlflcaLlon CorporaLlon of lndla, a CovernmenL of lndla enLerprlse wlll be Lhe
nodal agency aL CenLral CovernmenL level Lo lmplemenL Lhe programme
3.1.3 Subsldles should be properly LargeLed aL Lhe lnLended beneflclarles ln Lhe mosL efflclenL
manner. CovernmenL recognlzes Lhe need for provldlng necessary caplLal subsldy and sofL long-
Lerm debL flnances for lnvesLmenL ln rural elecLrlflcaLlon
3.1.6. 8esponslblllLy of operaLlon & malnLenance and cosL recovery could be dlscharged by
uLlllLles Lhrough approprlaLe arrangemenLs wlLh anchayaLs, local auLhorlLles, nCCs and oLher
franchlsees eLc.
S.2 GLNLkA1ICN
3.2.1 lnadequacy of generaLlon has characLerlzed power secLor operaLlon ln lndla. 1o provlde
avallablllLy of over 1000 unlLs of per caplLa elecLrlclLy by year 2012 lL had been esLlmaLed LhaL
need based capaclLy addlLlon of more Lhan 1,00,000 MW would be requlred durlng Lhe perlod
2002-12.
3.2.2 1he CovernmenL of lndla has lnlLlaLed several reform measures Lo creaLe a favourable
envlronmenL for addlLlon of new generaLlng capaclLy ln Lhe counLry. 1he LlecLrlclLy AcL 2003
has puL ln place a hlghly llberal framework for generaLlon. 1here ls no requlremenL of llcenslng
for generaLlon. 1he requlremenL of Lechno-economlc clearance of CLA for Lhermal generaLlon
pro[ecL ls no longer Lhere. lor hydroelecLrlc generaLlon also, Lhe llmlL of caplLal expendlLure,
above whlch concurrence of CLA ls requlred, would be ralsed sulLably from Lhe presenL level.
CapLlve generaLlon has been freed from all conLrols.
nydro Generat|on
3.2.3 PydroelecLrlclLy ls a clean and renewable source of energy. Maxlmum emphasls would be
lald on Lhe full developmenL of Lhe feaslble hydro poLenLlal ln Lhe counLry. 1he 30,000 MW
hydro lnlLlaLlve has been already launched and ls belng vlgorously pursued wlLh u8s for
pro[ecLs of 33,000 MW capaclLy already under preparaLlon.
3.2.6 Parnesslng hydro poLenLlal speedlly wlll also faclllLaLe economlc developmenL of SLaLes,
parLlcularly norLh-LasLern SLaLes, Slkklm, uLLaranchal, Plmachal radesh and !&k, slnce a large
proporLlon of our hydro power poLenLlal ls locaLed ln Lhese SLaLes. 1he SLaLes wlLh hydro
poLenLlal need Lo focus on Lhe full developmenL of Lhese poLenLlals aL Lhe earllesL.
3.2.7 Pydel pro[ecLs call for comparaLlvely larger caplLal lnvesLmenL. 1herefore, debL flnanclng
of longer Lenure would need Lo be made avallable for hydro pro[ecLs. CenLral CovernmenL ls
commlLLed Lo pollcles LhaL ensure flnanclng of vlable hydro pro[ecLs.
3.2.8 SLaLe CovernmenLs need Lo revlew procedures for land acqulslLlon, and oLher
approvals/clearances for speedy lmplemenLaLlon of hydroelecLrlc pro[ecLs.
3.2.9 1he CenLral CovernmenL wlll supporL Lhe SLaLe CovernmenLs for expedlLlous developmenL
of Lhelr hydroelecLrlc pro[ecLs by offerlng servlces of CenLral ubllc SecLor underLaklngs llke
naLlonal PydroelecLrlc ower CorporaLlon (nPC).
3.2.10 roper lmplemenLaLlon of naLlonal ollcy on 8ehablllLaLlon and 8eseLLlemenL (8&8)
would be essenLlal ln Lhls regard so as Lo ensure LhaL Lhe concerns of pro[ecL-affecLed famllles
are addressed adequaLely.
3.2.11 AdequaLe safeguards for envlronmenLal proLecLlon wlLh sulLable mechanlsm for
monlLorlng of lmplemenLaLlon of LnvlronmenLal AcLlon lan and 8&8 Schemes wlll be puL ln
place.
1herma| Generat|on
3.2.12 Lven wlLh full developmenL of Lhe feaslble hydro poLenLlal ln Lhe counLry, coal would
necessarlly conLlnue Lo remaln Lhe prlmary fuel for meeLlng fuLure elecLrlclLy demand.
3.2.13 lmporLed coal based Lhermal power sLaLlons, parLlcularly aL coasLal locaLlons, would be
encouraged based on Lhelr economlc vlablllLy. use of low ash conLenL coal would also help ln
reduclng Lhe problem of fly ash emlsslons.
3.2.14 SlgnlflcanL LlgnlLe resources ln Lhe counLry are locaLed ln 1amll nadu, Cu[araL and
8a[asLhan and Lhese should be lncreaslngly uLlllzed for power generaLlon. LlgnlLe mlnlng
Lechnology needs Lo be lmproved Lo reduce cosLs.
3.2.13 use of gas as a fuel for power generaLlon would depend upon lLs avallablllLy aL
reasonable prlces. naLural gas ls belng used ln Cas 1urblne /Comblned Cycle Cas 1urblne
(C1/CCC1) sLaLlons, whlch currenLly accounLs for abouL 10 of LoLal capaclLy. ower secLor
consumes abouL 40 of Lhe LoLal gas ln Lhe counLry. new power generaLlon capaclLy could
come up based on lndlgenous gas flndlngs, whlch can emerge as a ma[or source of power
generaLlon lf prlces are reasonable. A naLlonal gas grld coverlng varlous parLs of Lhe counLry
could faclllLaLe developmenL of such capaclLles.
3.2.16 lmporLed LnC based power planLs are also a poLenLlal source of elecLrlclLy and Lhe pace
of Lhelr developmenL would depend on Lhelr commerclal vlablllLy. 1he exlsLlng power planLs
uslng llquld fuels should shlfL Lo use of naLural Cas/LnC aL Lhe earllesL Lo reduce Lhe cosL of
generaLlon.
3.2.17 lor Lhermal power, economlcs of generaLlon and supply of elecLrlclLy should be Lhe basls
for cholce of fuel from among Lhe opLlons avallable. lL would be economlcal for new generaLlng
sLaLlons Lo be locaLed elLher near Lhe fuel sources e.g. plLhead locaLlons or load cenLres.
3.2.18 CeneraLlng companles may enLer lnLo medlum Lo long-Lerm fuel supply agreemenLs
speclally wlLh respecL Lo lmporLed fuels for commerclal vlablllLy and securlLy of supply.
Nuc|ear ower
3.2.19 nuclear power ls an esLabllshed source of energy Lo meeL base load demand. nuclear
power planLs are belng seL up aL locaLlons away from coalmlnes. Share of nuclear power ln Lhe
overall capaclLy proflle wlll need Lo be lncreased slgnlflcanLly. Lconomlcs of generaLlon and
resulLanL Larlff wlll be, among oLhers, lmporLanL conslderaLlons. ubllc secLor lnvesLmenLs Lo
creaLe nuclear generaLlon capaclLy wlll need Lo be sLepped up. rlvaLe secLor parLnershlp would
also be faclllLaLed Lo see LhaL noL only LargeLs are achleved buL exceeded.
Non-convent|ona| Lnergy Sources
3.2.20 leaslble poLenLlal of non-convenLlonal energy resources, malnly small hydro, wlnd and
blo-mass would also need Lo be explolLed fully Lo creaLe addlLlonal power generaLlon capaclLy.
WlLh a vlew Lo lncrease Lhe overall share of non-convenLlonal energy sources ln Lhe elecLrlclLy
mlx, efforLs wlll be made Lo encourage prlvaLe secLor parLlclpaLlon Lhrough sulLable
promoLlonal measures.
kenovat|on and Modern|zat|on (k&M)
3.2.21 Cne of Lhe ma[or achlevemenLs of Lhe power secLor has been a slgnlflcanL lncrease ln
avallablllLy and planL load facLor of Lhermal power sLaLlons speclally over Lhe lasL few years.
8enovaLlon and modernlzaLlon for achlevlng hlgher efflclency levels needs Lo be pursued
vlgorously and all exlsLlng generaLlon capaclLy should be broughL Lo mlnlmum accepLable
sLandards. 1he CovL. of lndla ls provldlng flnanclal supporL for Lhls purpose.
Capt|ve Generat|on
3.2.24 1he llberal provlslon ln Lhe LlecLrlclLy AcL, 2003 wlLh respecL Lo seLLlng up of capLlve
power planL has been made wlLh a vlew Lo noL only securlng rellable, quallLy and cosL effecLlve
power buL also Lo faclllLaLe creaLlon of employmenL opporLunlLles Lhrough speedy and efflclenL
growLh of lndusLry.
3.2.26 A large number of capLlve and sLandby generaLlng sLaLlons ln lndla have surplus capaclLy
LhaL could be supplled Lo Lhe grld conLlnuously or durlng cerLaln Llme perlods. under Lhe AcL,
capLlve generaLors have access Lo llcensees and would geL access Lo consumers who are
allowed open access. Crld lnLer-connecLlons for capLlve generaLors shall be faclllLaLed as per
secLlon 30 of Lhe AcL.
non-convenLlonal energy sources lncludlng co-generaLlon could also play a role. ApproprlaLe
commerclal arrangemenLs would need Lo be lnsLlLuLed beLween llcensees and Lhe capLlve
generaLors for harnesslng of spare capaclLy energy from capLlve power planLs Lhrough Lhe
approprlaLe 8egulaLory Commlsslon
S.3 1kANSMISSICN
3.3.1 1he 1ransmlsslon SysLem requlres adequaLe and Llmely lnvesLmenLs and also efflclenL and
coordlnaLed acLlon Lo develop a robusL and lnLegraLed power sysLem for Lhe counLry.
3.3.2 1he CenLral CovernmenL would faclllLaLe Lhe conLlnued developmenL of Lhe naLlonal Crld
for provldlng adequaLe lnfrasLrucLure for lnLer-sLaLe Lransmlsslon of power and Lo ensure LhaL
underuLlllzed generaLlon capaclLy ls faclllLaLed Lo generaLe elecLrlclLy for lLs Lransmlsslon from
surplus reglons Lo deflclL reglons.
1he CenLral 1ransmlsslon uLlllLy (C1u) and SLaLe 1ransmlsslon uLlllLy (S1u) have Lhe key
responslblllLy of neLwork plannlng and developmenL based on Lhe naLlonal LlecLrlclLy lan ln
coordlnaLlon wlLh all concerned agencles as provlded ln Lhe AcL.
1he SLaLe 8egulaLory Commlsslons have Lo noLlfy Lhe grld code under Lhe LlecLrlclLy AcL 2003
3.3.3 Cpen access ln Lransmlsslon has been lnLroduced Lo promoLe compeLlLlon amongsL Lhe
generaLlng companles who can now sell Lo dlfferenL dlsLrlbuLlon llcensees across Lhe counLry.
1hls should lead Lo avallablllLy of cheaper power.
1he 8egulaLory Commlsslons need Lo provlde faclllLaLlve framework for non-dlscrlmlnaLory
open access.
3.3.4 1he AcL prohlblLs Lhe SLaLe Lransmlsslon uLlllLles/Lransmlsslon llcensees from engaglng ln
Lradlng ln elecLrlclLy. ower purchase agreemenLs (As) wlLh Lhe generaLlng companles would
need Lo be sulLably asslgned Lo Lhe ulsLrlbuLlon Companles, sub[ecL Lo muLual agreemenL.
1he approprlaLe Commlsslons shall esLabllsh Lransmlsslon charges.
3.3.3 A well planned and sLrong Lransmlsslon sysLem wlll ensure noL only opLlmal uLlllzaLlon of
Lransmlsslon capaclLles buL also of generaLlon faclllLles and would faclllLaLe achlevlng ulLlmaLe
ob[ecLlve of cosL effecLlve dellvery of power. 1o faclllLaLe cosL effecLlve Lransmlsslon of power
across Lhe reglon, a naLlonal Lransmlsslon Larlff framework needs Lo be lmplemenLed by CL8C.
3.3.6 1he necessary regulaLory framework for provldlng non-dlscrlmlnaLory open access ln
Lransmlsslon as mandaLed ln Lhe LlecLrlclLy AcL 2003 ls essenLlal for slgnalllng efflclenL cholce ln
locaLlng generaLlon capaclLy and for encouraglng Lradlng ln elecLrlclLy for opLlmum uLlllzaLlon of
generaLlon resources and consequenLly for reduclng Lhe cosL of supply.
3.3.7 1he splrlL of Lhe provlslons of Lhe AcL ls Lo ensure lndependenL sysLem operaLlon Lhrough
nLuC, 8LuCs and SLuCs. 1hese dlspaLch cenLers, as per Lhe provlslons of Lhe AcL, are Lo be
operaLed by a CovernmenL company or auLhorlLy as noLlfled by Lhe approprlaLe CovernmenL.
3.3.10 Speclal mechanlsms would be creaLed Lo encourage prlvaLe lnvesLmenL ln Lransmlsslon
secLor so LhaL sufflclenL lnvesLmenLs are made for achlevlng Lhe ob[ecLlve of demand Lo be fully
meL by 2012.
S.4 DIS1kI8U1ICN
3.4.1 ulsLrlbuLlon ls Lhe mosL crlLlcal segmenL of Lhe elecLrlclLy buslness chaln. 1he real
challenge of reforms ln Lhe power secLor lles ln efflclenL managemenL of Lhe dlsLrlbuLlon secLor.
3.4.2 1he AcL provldes for a robusL regulaLory framework for dlsLrlbuLlon llcensees Lo safeguard
consumer lnLeresLs. lL also creaLes a compeLlLlve framework for Lhe dlsLrlbuLlon buslness,
offerlng opLlons Lo consumers, Lhrough Lhe concepLs of open access and mulLlple llcensees ln
Lhe same area of supply.
3.4.3 lor achlevlng efflclency galns proper resLrucLurlng of dlsLrlbuLlon uLlllLles ls essenLlal.
AdequaLe LranslLlon flnanclng supporL would also be necessary for Lhese uLlllLles.
3.4.4 Conduclve buslness envlronmenL ln Lerms of adequaLe reLurns would be necessary for
faclllLaLlng fundlng and aLLracLlng lnvesLmenLs ln dlsLrlbuLlon. MulLl-?ear 1arlff (M?1)
framework ls an lmporLanL sLrucLural lncenLlve Lo mlnlmlze rlsks for uLlllLles and consumers,
promoLe efflclency and rapld reducLlon of sysLem losses.
rlvaLe secLor parLlclpaLlon ln dlsLrlbuLlon needs Lo be encouraged for achlevlng Lhe requlslLe
reducLlon ln Lransmlsslon and dlsLrlbuLlon losses and lmprovlng Lhe quallLy of servlce Lo Lhe
consumers.
3.4.6 A Llme-bound programme should be drawn up by Lhe SLaLe LlecLrlclLy 8egulaLory
Commlsslons (SL8C) for segregaLlon of Lechnlcal and commerclal losses Lhrough energy audlLs.
SLandards for rellablllLy and quallLy of supply as well as for loss levels shall also be speclfled
,from Llme Lo Llme, so as Lo brlng Lhese ln llne wlLh lnLernaLlonal pracLlces by year 2012.
3.4.7 Cne of Lhe key provlslons of Lhe AcL on compeLlLlon ln dlsLrlbuLlon ls Lhe concepL of
mulLlple llcensees ln Lhe same area of supply Lhrough Lhelr lndependenL dlsLrlbuLlon sysLems.
1he SL8Cs are requlred Lo regulaLe Lhe Larlff lncludlng connecLlon charges Lo be recovered by a
dlsLrlbuLlon llcensee under Lhe provlslons of Lhe AcL..
3.4.9 1he AcL requlres all consumers Lo be meLered wlLhln Lwo years. 1he SL8Cs may obLaln
from Lhe ulsLrlbuLlon Llcensees Lhelr meLerlng plans, approve Lhese, and monlLor Lhe same. 1he
SL8Cs should encourage use of pre-pald meLers. ln Lhe flrsL lnsLance, 1Cu meLers for large
consumers wlLh a mlnlmum load of one MvA are also Lo be encouraged. 1he SL8Cs should also
puL ln place lndependenL Lhlrd-parLy meLer LesLlng arrangemenLs.
3.4.10 Modern lnformaLlon Lechnology sysLems may be lmplemenLed by Lhe uLlllLles on a
prlorlLy basls Lo faclllLaLe creaLlon of neLwork lnformaLlon and cusLomer daLa base whlch wlll
help ln managemenL of load, lmprovemenL ln quallLy, deLecLlon of LhefL and Lamperlng,
cusLomer lnformaLlon and prompL and correcL bllllng and collecLlon .
3.4.11 Plgh volLage ulsLrlbuLlon SysLem ls an effecLlve meLhod for reducLlon of Lechnlcal losses,
prevenLlon of LhefL, lmproved volLage proflle and beLLer consumer servlce. lL should be
promoLed Lo reduce L1/P1 raLlo keeplng ln vlew Lhe Lechno economlc conslderaLlons.
3.4.12 SCAuA and daLa managemenL sysLems are useful for efflclenL worklng of ulsLrlbuLlon
SysLems. A Llme bound programme for lmplemenLaLlon of SCAuA and daLa managemenL
sysLem

3.4.13 1he AcL has provlded for sLrlngenL measures agalnsL LhefL of elecLrlclLy. 1he SLaLes and
dlsLrlbuLlon uLlllLles should ensure effecLlve lmplemenLaLlon of Lhese provlslons. 1he SLaLe
CovernmenLs may seL up Speclal CourLs as envlsaged ln SecLlon 133 of Lhe AcL.
S.S kLCCVLk CI CCS1 CI SLkVICLS & 1AkGL11LD SU8SIDILS
3.3.1 1here ls an urgenL need for ensurlng recovery of cosL of servlce from consumers Lo make
Lhe power secLor susLalnable.
3.3.2 A mlnlmum level of supporL may be requlred Lo make Lhe elecLrlclLy affordable for
consumers of very poor caLegory. Consumers below poverLy llne who consume below a
speclfled level, say 30 unlLs per monLh, may recelve speclal supporL ln Lerms of Larlff whlch are
cross-subsldlzed. 1arlffs for such deslgnaLed group of consumers wlll be aL leasL 30 of Lhe
average (overall) cosL of supply. 1hls provlslon wlll be furLher re-examlned afLer flve years.

3.3.3 Cver Lhe lasL few decades cross-subsldles have lncreased Lo unsusLalnable levels. Cross-
subsldles hlde lnefflclencles and losses ln operaLlons. 1here ls urgenL need Lo correcL Lhls
lmbalance wlLhouL glvlng Larlff shock Lo consumers.
3.3.4 1he SLaLe CovernmenLs may glve advance subsldy Lo Lhe exLenL Lhey conslder approprlaLe
ln Lerms of secLlon 63 of Lhe AcL ln whlch case necessary budgeL provlslon would be requlred Lo
be made ln advance so LhaL Lhe uLlllLy does noL suffer flnanclal problems LhaL may affecL lLs
operaLlons. LfforLs would be made Lo ensure LhaL Lhe subsldles reach Lhe LargeLed beneflclarles
ln Lhe mosL LransparenL and efflclenL way.
S.6 1LCnNCLCG DLVLLCMLN1 AND k&D
3.6.1 LffecLlve conLrol of power sysLem aL sLaLe, reglonal and naLlonal level can be achleved
only Lhrough use of lnformaLlon 1echnology. AppllcaLlon of l1 has greaL poLenLlal ln reduclng
Lechnlcal & commerclal losses ln dlsLrlbuLlon and provldlng consumer frlendly servlces.
lnLegraLed resource plannlng and demand slde managemenL would also requlre adopLlng sLaLe
of Lhe arL Lechnologles.
Speclal efforLs would be made for research, developmenL demonsLraLlon and
commerclallzaLlon of non-convenLlonal energy sysLems. Such sysLems would need Lo meeL
lnLernaLlonal sLandards, speclflcaLlons and performance parameLers.
3.6.2 LfflclenL Lechnologles, llke super crlLlcal Lechnology, lCCC eLc and large slze unlLs would be
gradually lnLroduced for generaLlon of elecLrlclLy as Lhelr cosL effecLlveness ls esLabllshed.
SlmulLaneously, developmenL and deploymenL of Lechnologles for producLlve use of fly ash
would be glven prlorlLy and encouragemenL.
3.6.3 Slmllarly, cosL effecLlve Lechnologles would requlre Lo be developed for hlgh volLage
power flows over long dlsLances wlLh mlnlmum posslble losses.
3.6.4 A sulLable fundlng mechanlsm would be evolved for promoLlng 8& u ln Lhe ower SecLor.
Large power companles should seL aslde a porLlon of Lhelr proflLs for supporL Lo 8&u.
S.7 CCML1I1ICN AIMLD A1 CCNSUMLk 8LNLII1S
3.7.1 lL ls Lhe funcLlon of Lhe CenLral LlecLrlclLy 8egulaLory Commlsslon Lo lssue llcense for lnLer-
sLaLe Lradlng whlch would lnclude auLhorlzaLlon for Lradlng LhroughouL Lhe counLry.
1he A81 reglme lnLroduced by CL8C aL Lhe naLlonal level has had a poslLlve lmpacL. lL has also
enabled a credlble seLLlemenL mechanlsm for lnLra-day power Lransfers from llcenses wlLh
surpluses Lo llcenses experlenclng deflclLs. SL8Cs are advlsed Lo lnLroduce Lhe A81 reglme aL
Lhe SLaLe level wlLhln one year.
CapLlve generaLlng planLs should be permlLLed Lo sell elecLrlclLy Lo llcensees and consumers
when Lhey are allowed open access by SL8Cs under secLlon 42 of Lhe AcL .
S.8 IINANCING CWLk SLC1Ck kCGkAMMLS INCLUDING kIVA1L SLC1Ck Ak1ICIA1ICN
3.8.1 1o meeL Lhe ob[ecLlve of rapld economlc growLh and power for all" lncludlng household
elecLrlflcaLlon, lL ls esLlmaLed LhaL an lnvesLmenL of Lhe order of 8s.9,00,000 crores aL 2002-03
prlce level would be requlred Lo flnance generaLlon, Lransmlsslon, sub-Lransmlsslon,
dlsLrlbuLlon and rural elecLrlflcaLlon pro[ecLs.
1he AcL creaLes a conduclve envlronmenL for lnvesLmenLs ln all segmenLs of Lhe lndusLry, boLh
for publlc secLor and prlvaLe secLor,
3.8.4 CaplLal ls scarce. rlvaLe secLor wlll have mulLlple opLlons for lnvesLmenLs. 8eLurn on
lnvesLmenL wlll, Lherefore, need Lo be provlded ln a manner LhaL Lhe secLor ls able Lo aLLracL
adequaLe lnvesLmenLs aL par wlLh, lnvesLmenL opporLunlLles ln oLher secLors.
3.8.6 CompeLlLlon wlll brlng slgnlflcanL beneflLs Lo consumers , ueLalled guldellnes for
compeLlLlve blddlng as sLlpulaLed ln secLlon 63 of Lhe AcL have been lssued by Lhe CenLral
CovernmenL.

3.8.7 llnanclal vlablllLy of operaLlons and buslnesses would be essenLlal for growLh and
developmenL of Lhe secLor. ConcerLed efforLs would be requlred for resLorlng Lhe flnanclal
healLh of Lhe secLor. lor Lhls purpose, Larlff raLlonallzaLlon would need Lo be ensured by Lhe
SL8Cs. 1hls would also lnclude dlfferenLlal prlclng for base, lnLermedlaLe and peak power.
3.8.9 8ole of prlvaLe parLlclpaLlon ln generaLlon, Lransmlsslon and dlsLrlbuLlon would become
lncreaslngly crlLlcal ln vlew of Lhe rapldly growlng lnvesLmenL needs of Lhe secLor. 1he CenLral
CovernmenL and Lhe SLaLe CovernmenLs need Lo develop workable and successful models for
publlc prlvaLe parLnershlp.
1ransmlsslon & ulsLrlbuLlon Losses
3.8.10 lL would have Lo be clearly recognlzed LhaL ower SecLor wlll remaln unvlable unLll 1&u
losses are broughL down slgnlflcanLly and rapldly. A large number of SLaLes have been reporLlng
losses of over 40 ln Lhe recenL years. 8y any sLandards, Lhese are unsusLalnable and lmply a
sLeady decllne of power secLor operaLlons. ConLlnuaLlon of Lhe presenL level of losses would
noL only pose a LhreaL Lo Lhe power secLor operaLlons buL also [eopardlze Lhe growLh prospecLs
of Lhe economy as a whole. no reforms can succeed ln Lhe mldsL of such large pllferages on a
conLlnulng basls. 1hese losses have Lo be broughL down expedlLlously.
S.9 LNLkG CCNSLkVA1ICN
3.9.1 1here ls a slgnlflcanL poLenLlal of energy savlngs Lhrough energy efflclency and demand
slde managemenL measures. ln order Lo mlnlmlze Lhe overall requlremenL, energy conservaLlon
and demand slde managemenL (uSM) ls belng accorded hlgh prlorlLy. 1he Lnergy ConservaLlon
AcL has been enacLed and Lhe 8ureau of Lnergy Lfflclency has been seLup.
3.9.3 erlodlc energy audlLs have been made compulsory for power lnLenslve lndusLrles under
Lhe Lnergy ConservaLlon AcL. CLher lndusLrles may also be encouraged Lo adopL energy audlLs
and energy conservaLlon measures. Lnergy conservaLlon measures shall be adopLed ln all
CovernmenL bulldlngs for whlch savlng poLenLlal has been esLlmaLed Lo be abouL 30 energy.
Solar waLer heaLlng sysLems and solar passlve archlLecLure can conLrlbuLe slgnlflcanLly Lo Lhls
efforL.
3.9.3 ln Lhe agrlculLure secLor, Lhe pump seLs and Lhe waLer dellvery sysLem englneered for hlgh
efflclency would be promoLed. ln Lhe lndusLrlal secLor, energy efflclenL Lechnologles should be
used and energy audlLs carrled ouL Lo lndlcaLe scope for energy conservaLlon measures. MoLors
and drlve sysLem are Lhe ma[or source of hlgh consumpLlon ln AgrlculLural and lndusLrlal
SecLor.
3.9.6 ln order Lo reduce Lhe requlremenLs for capaclLy addlLlons, Lhe dlfference beLween
elecLrlcal power demand durlng peak perlods and off-peak perlods would have Lo be reduced.
SulLable load managemenL Lechnlques should be adopLed for Lhls purpose. ulfferenLlal Larlff
sLrucLure for peak and off peak supply and meLerlng arrangemenLs (1lme of uay meLerlng)
should be conduclve Lo load managemenL ob[ecLlves. 8egulaLory Commlsslons should ensure
adherence Lo energy efflclency sLandards by uLlllLles.
3.9.7 lor effecLlve lmplemenLaLlon of energy conservaLlon measures, role of Lnergy Servlce
Companles would be enlarged.
S.10 LNVIkCNMLN1AL ISSULS
3.10.1 LnvlronmenLal concerns would be sulLably addressed Lhrough approprlaLe advance
acLlon by way of comprehenslve LnvlronmenLal lmpacL AssessmenL and lmplemenLaLlon of
LnvlronmenL AcLlon lan (LA).
3.10.2 SLeps would be Laken for coordlnaLlng Lhe efforLs for sLreamllnlng Lhe procedures ln
regard Lo granL of envlronmenLal clearances lncludlng seLLlng up of 'Land 8ank' and 'loresL
8ank'.
3.10.3 ApproprlaLe caLchmenL area LreaLmenL for hydro pro[ecLs would also be ensured and
monlLored.
3.10.4 SeLLlng up of coal washerles wlll be encouraged. SulLable sLeps would also be Laken so
LhaL uLlllzaLlon of fly ash ls ensured as per envlronmenLal guldellnes.
3.10.3 SeLLlng up of munlclpal solld wasLe energy pro[ecLs ln urban areas and recovery of
energy from lndusLrlal effluenLs wlll also be encouraged wlLh a vlew Lo reduclng envlronmenLal
polluLlon aparL from generaLlng addlLlonal energy.
3.10.6 lull compllance wlLh prescrlbed envlronmenLal norms and sLandards musL be achleved
ln operaLlons of all generaLlng planLs.
S.11 1kAINING AND nUMAN kLSCUkCL DLVLLCMLN1
Speclal aLLenLlon would need Lo be pald by Lhe lndusLry for esLabllshlng Lralnlng lnfrasLrucLure
ln Lhe fleld of elecLrlclLy dlsLrlbuLlon, regulaLlon, Lradlng and power markeLs.
S.12 CCGLNLkA1ICN AND NCN-CCNVLN1ICNAL LNLkG SCUkCLS
3.12.1 non-convenLlonal sources of energy belng Lhe mosL envlronmenL frlendly Lhere ls an
urgenL need Lo promoLe generaLlon of elecLrlclLy based on such sources of energy.
3.12.2 1he LlecLrlclLy AcL 2003 provldes LhaL co-generaLlon and generaLlon of elecLrlclLy from
non-convenLlonal sources would be promoLed by Lhe SL8Cs rogresslvely Lhe share of
elecLrlclLy from non-convenLlonal sources would need Lo be lncreased as prescrlbed by SLaLe
LlecLrlclLy 8egulaLory Commlsslons. Such purchase by dlsLrlbuLlon companles shall be Lhrough
compeLlLlve blddlng process.
3.12.3 lndusLrles ln whlch boLh process heaL and elecLrlclLy are needed are well sulLed for
cogeneraLlon of elecLrlclLy. A slgnlflcanL poLenLlal for cogeneraLlon exlsLs ln Lhe counLry,
parLlcularly ln Lhe sugar lndusLry. SL8Cs may promoLe arrangemenLs beLween Lhe co-generaLor
and Lhe concerned dlsLrlbuLlon llcensee for purchase of surplus power from such planLs.
CogeneraLlon sysLem also needs Lo be encouraged ln Lhe overall lnLeresL of energy efflclency
and also grld sLablllLy.
S.13 kC1LC1ICN CI CCNSUMLk IN1LkLS1S AND UALI1 S1ANDAkDS
3.13.1 ApproprlaLe Commlsslon should regulaLe uLlllLles Lo provlde quallLy of power supply.
arameLers should lnclude, amongsL oLhers, frequency and duraLlon of lnLerrupLlon, volLage
parameLers, Lransformer fallure raLes, walLlng Llme for resLoraLlon of supply, percenLage
defecLlve meLers and walLlng llsL of new connecLlons.
3.13.2 8ellablllLy lndex (8l) of supply of power Lo consumers should be lndlcaLed by Lhe
dlsLrlbuLlon llcensee. A road map for declaraLlon of 8l for all clLles and Lowns up Lo Lhe ulsLrlcL
PeadquarLer Lowns as also for rural areas, should be drawn by up SL8Cs. 1he daLa of 8l should
be complled and publlshed by CLA.
3.13.3 lL ls advlsed LhaL all SLaLe Commlsslons should formulaLe Lhe guldellnes regardlng seLLlng
up of grlevance redressal forum by Lhe llcensees as also Lhe regulaLlons regardlng Lhe
Cmbudsman and also appolnL/deslgnaLe Lhe Cmbudsman wlLhln slx monLhs.
6.0 CCCkDINA1LD DLVLLCMLN1
6.1 LlecLrlclLy belng a concurrenL sub[ecL, a well-coordlnaLed approach would be necessary for
developmenL of Lhe power secLor. 1he CenLral CovernmenL would asslsL Lhe SLaLes. lL would be
playlng a supporLlve role ln fresh capaclLy addlLlon and a ma[or role ln developmenL of Lhe
naLlonal Crld. 1he SLaLe CovernmenLs need Lo ensure Lhe success of reforms and resLoraLlon of
flnanclal healLh ln dlsLrlbuLlon, whlch alone can enable Lhe creaLlon of requlslLe generaLlon
capaclLy. 1he 8egulaLory Commlsslons have Lhe responslblllLy of ensurlng LhaL Lhe regulaLory
processes faclllLaLe Lhe aLLalnmenL of Lhls ob[ecLlve..
1he LlecLrlclLy AcL, 2003 also provldes for mechanlsms llke CoordlnaLlon forum" and Advlsory
CommlLLees" Lo faclllLaLe consulLaLlve process.
(A[ay Shankar)
AddlLlonal SecreLary Lo Lhe CovernmenL of lndla









Llectricity 1ariff Policy 2006

1he CovernmenL of lndla noLlfled Lhe LlecLrlclLy 1arlff ollcy ln !anuary, 2006.

1he ob[ecLlves of Lhls Larlff pollcy are Lo:
(a) Lnsure avallablllLy of elecLrlclLy Lo consumers aL reasonable and compeLlLlve raLes,
(b) Lnsure flnanclal vlablllLy of Lhe secLor and aLLracL lnvesLmenLs,
(c) romoLe Lransparency, conslsLency and predlcLablllLy ln regulaLory approaches across
[urlsdlcLlons and mlnlmlse percepLlons of regulaLory rlsks,
(d) romoLe compeLlLlon, efflclency ln operaLlons and lmprovemenL ln quallLy

SallenL feaLures of Lhe pollcy are as follows

1. All fuLure requlremenL of power should be procured compeLlLlvely by dlsLrlbuLlon llcensees
Lven for Lhe ubllc SecLor pro[ecLs, Larlff of all new generaLlon and Lransmlsslon pro[ecLs should
be declded on Lhe basls of compeLlLlve blddlng afLer a perlod of flve years
2. CL8C/SL8Cs would noLlfy, from Llme Lo Llme, Lhe raLe of reLurn for generaLlon and
Lransmlsslon pro[ecLs keeplng ln vlew Lhe assessmenL of overall rlsk and Lhe prevalenL cosL of
caplLal. 8eLurn should aLLracL lnvesLmenLs aL par wlLh oLher secLors so LhaL Lhe elecLrlclLy secLor
ls able Lo creaLe adequaLe capaclLy and growLh of Lhe secLor.
1he SLaLe Commlsslon may conslder 'dlsLrlbuLlon margln' as basls for allowlng reLurns ln
dlsLrlbuLlon buslness conslderlng Lhe lssues such as reducLlon ln AggregaLe 1echnlcal and
Commerclal losses, lmprovlng Lhe performance and reducLlon ln cosL of supply.
3. lor flnanclng of caplLal cosL of pro[ecLs, a uebL : LqulLy raLlo of 70:30 should be adopLed.
romoLers would be free Lo have hlgher quanLum of equlLy lnvesLmenLs buL Lhe equlLy ln
excess of Lhls norm should be LreaLed as loan
4. 1he CenLral Commlsslon may noLlfy Lhe raLes of depreclaLlon ln respecL of generaLlon and
Lransmlsslon asseLs. 1he depreclaLlon raLes so noLlfled would also be appllcable for dlsLrlbuLlon
1he raLes of depreclaLlon so noLlfled would be appllcable for Lhe purpose of Larlffs as well as
accounLlng.
1he CenLral Commlsslon would, ln consulLaLlon wlLh Lhe CenLral LlecLrlclLy AuLhorlLy, noLlfy
operaLlng norms from Llme Lo Llme for generaLlon and Lransmlsslon. 1he SL8C would adopL
Lhese norms. CperaLlng norms for dlsLrlbuLlon neLworks would be noLlfled by Lhe concerned
SL8Cs.
6. 1he mulLl year Larlff (M?1) framework ls Lo be adopLed for any Larlffs Lo be deLermlned from
Aprll 1, 2006.
(1he concepL of M?1 glves an elemenL of cerLalnLy Lo all sLakeholders. 1he baslc premlse ls LhaL
Larlffs would noL flucLuaLe beyond a cerLaln bandwldLh unless Lhere are force ma[eure
condlLlons. 1he consumer would have a falr ldea of whaL Lo expecL ln Lhe nexL Lhree Lo flve
years and Lhe uLlllLy would also be able Lo plan lLs buslness havlng known Lhe prlnclples for
Larlff deLermlnaLlon for Lhe conLrol perlod. 1he M?1 framework wlll dlvlde all cosLs lnLo Lwo
broad caLegorles -- conLrollables and non-conLrollables. LxpendlLures on admlnlsLraLlve and
general expenses, repalr and malnLenance wlll come under conLrollables whlle power purchase
and rlse ln cosLs wlll come under non-conLrollables. )
7. SLaLe CovernmenLs have Lhe rlghL Lo lmpose duLles, Laxes, cess on sale or consumpLlon of
elecLrlclLy. lor reallzlng Lhe goal of maklng avallable elecLrlclLy Lo consumers aL reasonable and
compeLlLlve prlces, lL ls necessary LhaL such duLles are kepL aL reasonable level.
8. AvallablllLy 8ased 1arlff (A81) ls Lo be lnLroduced aL SLaLe level by Aprll 2006.

What Is ABT?
lL ls a performance-based Larlff for Lhe supply of elecLrlclLy
lL ls also a new sysLem of schedullng and despaLch, whlch requlres boLh generaLors and
beneflclarles Lo commlL Lo day-ahead schedules.
lL ls a sysLem of rewards and penalLles seeklng Lo enforce day ahead pre-commlLLed schedules,
Lhough varlaLlons are permlLLed lf noLlfled Cne and one half hours ln advance.
1he order emphaslses prompL paymenL of dues. non-paymenL of prescrlbed charges wlll be
llable for approprlaLe acLlon
9. ower urchase AgreemenL should ensure adequaLe and bankable paymenL securlLy
arrangemenLs Lo Lhe CeneraLlng companles. ln case of perslsLlng defaulL Lhe generaLlng
companles may sell Lo oLher buyers.
10. Commlsslon should creaLe an enabllng envlronmenL LhaL encourages capLlve power planLs
Lo be connecLed Lo Lhe grld.
Wheellng charges and oLher Lerms and condlLlons for lmplemenLaLlon should be deLermlned ln
advance by Lhe respecLlve SLaLe Commlsslon,
Crld connecLed capLlve planLs could also supply power Lo non-capLlve users connecLed Lo Lhe
grld
10. Appropriate Commission shall fix a minimum percentage for purchase of energy
from Non-conventional sources of energy generation including Co-generation
11. A sulLable Lransmlsslon Larlff framework for all lnLer-SLaLe Lransmlsslon ls Lo be evolved Lo
share Lhe LoLal Lransmlsslon cosL ln proporLlon Lo Lhelr respecLlve uLlllzaLlon of Lhe Lransmlsslon
sysLem.
12. Cross subsldles for dlfferenL consumers Lo be broughL down wlLhln Lhe range of + 20 of
average supply by Lhe end of year 2010-11






Rural Llectrification Policy 2006
1he CovernmenL of lndla had announced Lhe 8ural LlecLrlflcaLlon ollcy ln 2006.
1he ollcy alms aL :-
- rovlslon of access Lo elecLrlclLy Lo all households by year 2009.
- CuallLy and rellable power supply aL reasonable raLes.
- Mlnlmum llfellne consumpLlon of 1 unlL per household per day as a merlL good by year 2012.
Salient features of the Policy

1. Crld connecLlvlLy ls Lhe normal way of elecLrlflcaLlon of vlllages.
lor vlllages/hablLaLlons, where grld connecLlvlLy would noL be feaslble or noL cosL effecLlve, off-
grld soluLlons based on sLand-alone sysLems may be Laken up for supply of elecLrlclLy so LhaL
every household geLs access Lo elecLrlclLy.
2. 1he SLaLe CovernmenLs should, wlLhln 6 monLhs prepare and noLlfy a 8ural LlecLrlflcaLlon
lan Lo achleve Lhe goal of provldlng access Lo all households whlch lncludes Lhe elecLrlflcaLlon
dellvery mechanlsms (grld or sLand alone)
3. 8ural LlecLrlflcaLlon CorporaLlon LlmlLed (8LC), a CovernmenL of lndla enLerprlse under Lhe
MlnlsLry of ower, ls Lhe nodal agency aL CenLral CovernmenL level Lo lmplemenL Lhe rural
elecLrlflcaLlon programme
4. Local communlLy Lo be lnvolved ln rural elecLrlflcaLlon programme parLlcularly Lhe women
3. rogrammes for encouraglng energy efflclenL equlpmenL speclally lrrlgaLlon pump seLs have
Lo be Laken up
6. 1he Larlff for sale of elecLrlclLy generaLed from sLandalone sysLems ls Lo be declded by
markeL forces, however Lhe beneflL of flnanclal asslsLance/ caplLal subsldy recelved from Lhe
governmenL should be fully passed on Lo Lhe consumers
7. 1he pollcy enables Lhe franchlsee arrangemenL for local managemenL of rural dlsLrlbuLlon of
elecLrlclLy
As far as posslble Lhe franchlsee Lo be selecLed based on compeLlLlve blddlng
8. 1here ls a provlslon for speclal and auLomaLlc approval for sLandalone sysLems of upLo 1 MW
whlch are based on cosL effecLlve proven Lechnology and use locally avallable resource such as
blomass.







Renewable Lnergy Power Policies

1he LlecLrlclLy AcL and several pollcles of Lhe CovernmenL promoLe renewable energy ln Lhe
counLry as shown below
Electricity Act 2003Section 86. (1):. promoLe cogeneraLlon and generaLlon of elecLrlclLy from
renewable sources of energy------- eLc
National Electricity Policy 2005 sLlpulaLes LhaL progresslvely Lhe share of elecLrlclLy from
non-convenLlonal sources would need Lo be lncreased------ eLc
Tariff Policy 2006 Lhe ApproprlaLe Commlsslon shall flx a mlnlmum percenLage for purchase of
energy from renewable------ eLc
National Rural Electrification Policies, 2006 : off-grld soluLlons based on sLand-alone sysLems
wlLh renewable energy sources may be Laken up for supply of elecLrlclLy
Renewable Energy Programme wise (8uy-back raLe: 8s. /unlL)
S.No. State / UT Wind Power Small Hydro Power Biomass Power
1. Andhra radesh 3.37
flxed for 3 yrs
2.69 (04-03) 2.63 (03-06)
Lsc [ 1 for 3 yrs
2. Arunachal
radesh
- - -
3. Assam - - -
4. 8lhar - - -
ChhaLlsgarh - - 2.71 (03-06)
3 Cu[araL 3.37
flxed for 20 yrs
- 3.00
no escalaLlon.
6. Paryana - 2.23 (94-93) 4.00 -blomass
3.74 - cogen.
Lsc. [ 2 (base 2007-
08)
7. Plmachal
radesh
- 2.30 -
8. ! & k - - -
9 !harkhand - - -
10. karnaLaka 3.40
flxed for 10 yrs
2.90 2.74-cogen.
2.88 - blomass
Lsc [1 for 10 yrs
(base04-03)
11. kerala 3.14
flxed for 20 yrs
- 2.80 (2000-01)
Lsc [ 3 for 3 yrs
12. Madhya
radesh
3.97 - 3.30

2.23 3.33-3.14
Lsc. [ 0.03-0.08 for
20 yrs.
13. MaharashLra 3.30
Lsc [ 0.13 per yr
2.23
(99-00)
3.03- cogen.
3.04-3.43-blomass
Lsc [ 1 for 13 yrs
14. Manlpur - - -
13. Meghalaya - - -
16. Mlzoram - - -
17. nagaland - - -
18. Crlssa - - -
19. un[ab - 2.73 (98-99) 3.01 (01-02) Lsc [
3 for 3 yrs llmlLed Lo
3.48
20. 8a[asLhan 2.91
Lsc[0.03 for 10 yrs
2.73 (98-99) 3.60-3.96

21. Slkklm - - -
22. 1amll nadu 2.70 (flxed) - 2.73 (2000-01)*
Lsc [ 3 for 9 yrs
23. 1rlpura - - -
24. uLLar radesh - 2.23

ollcles for wheellng/ banklng/ Lhlrd parL sale vary from sLaLe Lo sLaLe
Incentives for wind and biomass power
-lncome 1ax Pollday
-AcceleraLed uepreclaLlon
-Concesslonal CusLom duLy/duLy free lmporL
-Lnergy buy back, power wheellng & banklng faclllLles
-Sale 1ax concesslon beneflLs
-LlecLrlclLy 1ax exempLlon
-CaplLal Subsldy
Generation Based Incentive (GBI)
1he C8l Scheme ls appllcable only for Lhose power producers who do noL avall of Lhe
acceleraLed depreclaLlon beneflLs under Lhe lncome 1ax AcL.
Crld lnLegraLed pro[ecLs of capaclLy of more Lhan 3 MW shall be ellglble for Lhls scheme.
LlecLrlclLy generaLed from Lhe pro[ecL should be sold Lo Lhe grld.
1he Mn8L wlll provlde Lhe C8l of 8s.0.30 per unlL for a perlod of Len years Lo Lhe ellglble
pro[ecL promoLers Lhrough l8LuA.
1hls lncenLlve shall be ln addlLlon Lo Lhe Larlff deLermlned by Lhe SL8C.
1he l8LuA wlll dlsburse Lhe generaLlon based lncenLlve Lo Lhe generaLor on half yearly basls
Lhrough e-paymenL.
FDI Inflows to Non-conventional Energy - Government Initiatives
1he forelgn lnvesLors are enLlLled Lo lndulge ln [olnL operaLlons wlLh lndlan counLerparLs
Lhrough Lechnologlcal and flnanclal collaboraLlons for esLabllshlng renewable energy based
power generaLlon pro[ecLs.
lul up Lo 100 ls allowed ln case of equlLy
1he CenLral CovernmenL has been encouraglng forelgn lnvesLors Lo esLabllsh renewable energy
based power generaLlon pro[ecL on 8ulld-Cwn-CperaLe basls.

Jawaharlal Nehru National Solar Mission
1he mlsslon LargeLs 20,000 MW grld solar power, 2,000 MW off grld solar appllcaLlons and 20
mllllon sq meLers of solar Lhermal collecLors by Lhe year 2022.
1he mlsslon lnlLlally alms aL generaLlng 200 MW by 2012,
1hree 1echnlcal faclllLles wlll be creaLed ln Lhe 8&u campus of Lhe Solar Lnergy CenLre slLuaLed
on Lhe Curgaon-larldabad 8oad.
l) grld connecLed solar Lhermal power planL of 1 MW capaclLy.
ll) a plloL pro[ecL based on a solar concenLraLor Lechnology LhaL promlses dellverlng low cosL
Lhermal energy.
lll)a 20 kW solar phoLovolLalc power planL for LesLlng varlous deslgn conflguraLlons.
Development of Solar Cities
1he governmenL of lndla plans Lo develop 60 solar clLles durlng Lhe (2007-12), Lo boLh meeL Lhe
nagpur clLy as flrsL model solar clLy by 2012
10 of Lhe pro[ecLed energy demand of Lhe clLy Lo be meL Lhrough energy efflclency measures
and renewable energy sysLems
New nydro ower o||cy
1he new hydro pollcy approved by Lhe CablneL on !an. 03, 2008, wlll beneflL boLh prlvaLe and
publlc hydro power producers.
ln order Lo encourages prlvaLe producers Lo underLake Pydro pro[ecLs ln dlfflculL and remoLe
areas, exempLlon from Larlff based compeLlLlve blddlng whlch ls currenLly avallable only Lo
ubllc SecLor underLaklngs upLo !anuary 2011, ls now also avallable Lo prlvaLe hydro pro[ecLs.
1he developer wlll have Lhe faclllLy of merchanL sale of upLo 40 of Lhe saleable energy ln
hydro pro[ecLs.
An addlLlonal 1 free power over and above 12 wlll be earmarked for a Local Area
uevelopmenL lund almed aL provldlng a regular sLream of revenue for lncome generaLlon,
lnfrasLrucLure creaLlon and welfare schemes ln Lhe affecLed areas.
AL presenL 12 of power generaLed ls Lo be supplled free of charge Lo Lhe sLaLe where Lhe planL
ls locaLed)
Lach pro[ecL affecLed famlly (Al) wlll geL 100 unlLs of elecLrlclLy every monLh for a perlod of 10
years free of charge.
ro[ecL auLhorlLles wlll consLrucL houses aL reseLLled slLes for pro[ecL affecLed persons.
AL every pro[ecL slLe an lndusLrlal Lralnlng lnsLlLuLe (l1l) wlll be seL up 6 monLhs before Lhe
beglnnlng of Lhe pro[ecL work ln order Lo Lraln pro[ecL affecLed people Lo underLake skllled and
seml-skllled [obs.
ro[ecL affecLed persons wlll be provlded [obs ln Lhe pro[ecL.
Nat|ona| o||cy on 8|ofue|s
1he ollcy wlll brlng abouL acceleraLed developmenL and promoLlon of Lhe culLlvaLlon,
producLlon and use of blofuels Lo lncreaslngly subsLlLuLe peLrol and dlesel
An lndlcaLlve LargeL of 20 blendlng of blofuels, boLh for blo-dlesel and blo-eLhanol, by 2017 ls
proposed.
1he blendlng level of blo eLhanol has already been made mandaLory, effecLlve from CcLober,
2008, and wlll conLlnue Lo be mandaLory.
1he focus for developmenL of blofuels ln lndla wlll be Lo uLlllze wasLe and degraded foresL and
non-foresL lands only for culLlvaLlon of shrubs and Lrees bearlng non-edlble oll seeds for
producLlon of blo-dlesel.
ln lndla, blo-eLhanol ls produced malnly from molasses, a by-producL of Lhe sugar lndusLry.
ln fuLure Loo, lL would be ensured LhaL Lhe nexL generaLlon of Lechnologles ls based on nonfood
feed sLocks.

Therefore, the issue of fuel vs. food security is not relevant in the Indian context.

CulLlvaLors, farmers, landless laborers, anchayaLs eLc. wlll be encouraged Lo underLake
planLaLlons LhaL provlde Lhe feedsLock for blo-dlesel and blo-eLhanol.
Such employmenL wlll be made ellglble for coverage under Lhe naLlonal 8ural LmploymenL
CuaranLee rogramme (n8LC).
CorporaLes wlll also be enabled Lo underLake planLaLlons Lhrough conLracL farmlng
Such culLlvaLlon / planLaLlon wlll be supporLed Lhrough a Mlnlmum SupporL rlce for Lhe non-
edlble oll seeds used Lo produce blo-dlesel.
1he responslblllLy of sLorage, dlsLrlbuLlon and markeLlng of blofuels would resL wlLh Lhe oll
markeLlng companles ( CMCs)
naLlonal 8ank of AgrlculLure and 8ural uevelopmenL (nA8A8u) would provlde flnanclng
Lowards loans Lo farmers for planLaLlons.
lndlan 8enewable Lnergy uevelopmenL Agency (l8LuA), Small lndusLrles uevelopmenL 8ank of
lndla (Slu8l) and oLher flnanclng agencles as well as commerclal banks would be acLlvely
lnvolved ln provldlng flnance for varlous acLlvlLles under Lhe enLlre blofuel value chaln, aL
dlfferenL levels.
8lofuel Lechnologles and pro[ecLs would be allowed 100 forelgn equlLy Lhrough auLomaLlc
approval rouLe Lo aLLracL lorelgn ulrecL lnvesLmenL (lul), provlded blo-fuel ls for domesLlc use
only, and noL for exporL.
CusLom and exclse duLy concesslons would be provlded on planL and machlnery for producLlon
of blo-dlesel or blo-eLhanol,
MlnlsLry of new & 8enewable Lnergy has been glven Lhe responslblllLy of ollcy and overall
CoordlnaLlon concernlng blo-fuels.