Regulatory Frameworks of Power Sector In india

The Electricity Act is the principal legislation on generation, transmission, distribution, trade and use of electricity in India. It also provides an elaborate framework of bodies to administer the activities under the Electricity Act.

Among other things, the Electricity Act delicensed generation activities except hydropower. As electricity is a concurrent list subject matter under the Constitution of India, both Parliament and the state legislatures can enact laws.

The main objectives of the Electricity Act 2003 are:

  • Promoting competition.
  • Protecting the interest of consumers.
  • Ensuring electricity supply to all areas along with a rationalisation of tariffs.
  • Ensuring transparent policies and promotion of efficiency.

The CEA is the statutory body under the Electricity Act that advises Government of India on establishing policies, safety requirements and technical standards. The Government of India (in consultation with the states and the CEA) sets policies (such as the NTP and National Electricity Policy) as a guideline for the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs) when they make their regulations.

The regulatory commissions are set up at the central and state level to regulate and oversee generation, distribution and transmission of electricity. They are independent bodies with functions as specified under the Electricity Act.

At the central level, CERC has the responsibility to discharge the following functions which are under Electricity Act 2003. There are mainly two types of functions i.e. Mandatory and Advisory. They are explained as below

Mandatory Functions of CERC

  • Regulating the tariffs of the generating companies that are owned or controlled by the Government of India.
  • Regulating tariffs of generating companies (other than those owned or controlled by the Government of India), if these generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one state.
  • Regulate inter-state transmission of electricity.
  • Determine tariffs for inter-state transmission of electricity.
  • Adjudicating disputes involving generating companies or transmission licensees in relation to any of the previous matters.
  • Issuing licences to transmission licensees and electricity traders w.r.t. to their inter-state operations.
  • Improve access to information for all stakeholders
  • Grid Code are to be specify having regard to Grid Standards
  • It specifies and enforces the standards with respect to quality, continuity and reliability of service by licensees
  • It fixes the trading margin in the inter-State trading of electricity, if considered, necessary
  • It discharges such other functions as may be assigned under the Act

Advisory Functions of CERC

  • Formulation of National Electricity Policy and Tariff Policy
  • Promotion of competition, efficiency and economy in the activities of the electricity industry
  • Promotion of investment in electricity industry
  • Any other matter referred to the Central Commission by the Central Government

At the state level, the SERCs perform similar functions to those of CERC. The functions of SERCs include the following:

Mandatory Functions of SERC

  • Determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:Provided that where open access has been permitted to a category of consumers u/s 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers.
  • Regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;
  • Facilitate intra-State transmission and wheeling of electricity;
  • Issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State;
  • Promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;
  • Adjudicate upon the disputes between the licensees and generating companies and to refer any dispute for arbitration;
  • Levy fee for the purposes of this Act;
  • Specify State Grid Code consistent with the Grid Code specified under clause (h) of sub-section (1) of Section 79;
  • Specify or enforce standards with respect to quality, continuity and reliability of service by licensees;
  • Fix the trading margin in the intra-State trading of electricity, if considered, necessary;
  • Discharge such other functions as may be assigned to it under this Act.

Advisory functions of SERC:

  • promotion of competition, efficiency and economy in activities of the electricity industry;
  • Promotion of investment in electricity industry;
  • Reorganisation and restructuring of electricity industry in the State;
  • Matters concerning generation, transmission, distribution and trading of electricity or any other matter referred to the State Commission by that Government.
  • The State Commission shall ensure transparency while exercising its powers and discharging its functions.
  • In discharge of its functions, the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published u/s

For detailed information, you can explore the websites of CERC and SERC. Website URL links are tabulated below.

Central Electricity Regulatory Commission:

# State Name State Regulator Name SERC Website
1 Himachal Pradesh HP Electricity regulatory Commission
2 Punjab Punjab State Electricity Regulatory Commission
3 Haryana Haryana Electricity Regulatory Commission
4 Rajasthan Rajasthan Electricity Regulatory Commission
5 Uttarakhand Uttarakhand Electricity Regulatory Commission
6 Uttar Pradesh Uttar Pradesh Electricity Regulatory Commission
7 Chhattisgarh Chhattisgarh State Electricity Regulatory Commission
8 Gujarat Gujarat Electricity Regulatory Commission
9 Madhya Pradesh MP State Electricity Regulatory Commission
10 Maharashtra Maharashtra Electricity Regulatory Commission
11 Andhra Pradesh Andhra Pradesh Electricity Regulatory Commission
12 Karnataka Karnataka Electricity Regulatory Commission
13 Telangana Telangana State Electricity Regulatory Commission
14 Kerala Kerala State Electricity Regulatory Commission
15 Tamil Nadu Tamil Nadu Electricity Regulatory Commission
16 Bihar Bihar Electricity Regulatory Commission
17 Jharkhand Jharkhand State Electricity Regulatory Commission
18 Odisha Odisha State Electricity Regulatory Commission
19 West Bengal West Bengal Electricity Regulatory Commission
20 Sikkim Sikkim State Electricity Regulatory Commission
21 Arunachal Pradesh Arunachal Pradesh State Electricity Regulatory Commission
22 Assam Assam Electricity Regulatory Commission
23 Manipur Joint Electricity Regulatory Commission for Manipur and Mizoram
24 Meghalaya Meghalaya State Electricity Regulatory Commission
25 Mizoram Joint Electricity Regulatory Commission for Manipur and Mizoram
26 Nagaland Nagaland Electricity Regulatory Commission
27 Tripura Tripura Electricity Regulatory Commission
28 Goa Joint Electricity Regulatory Commission