Licensing of Transmission and Supply

Licensing

(1) No person, other than those authorized to do so by license or by virtue of exemption under this Act or authorised to or exempted by any other authority under the Electricity (Supply) Act, 1948, shall engage in the State in the business of,-

(a) transmitting electricity; or

(b) supplying electricity.

(2)Where any difference or dispute arises as to whether any person is engaged or is not engaged or about to engage in the business of transmitting or supplying electricity as specified in sub-section (1), the matter shall be referred to the Commission and the decision of the Commission shall be final.

(3) The Commission shall have the power to order any unlicensed person to cease operating and disconnect its apparatus.

(4) Notwithstanding anything contained in any other provisions of this Act and until the establishment of the Commission in terms of section 3, the State Government shall have the power to grant provisional licences under this section having a duration not exceeding twelve months to any person or persons to engage in the state in the business of transmission or supply of electricity on such terms and conditions as the State Government may determine consistent with the provisions of this Act, subject to the following conditions, namely:-

(a) upon the establishment of the Commission, each of the provisional licences granted by the State Government shall be placed before the Commission and shall be deemed to constitute an application for grant of a license by the Commission under the provisions of this Act; and

(b) each provisional license granted under this section shall cease to be valid from the date notified by the Commission.

(5)The State Government, shall be entitled to confer on the provisional licensees under sub-section (4) such powers, rights and authorization as the Commission is entitled to grant to the licensees under this Act.

Grant of licences by the Commission

15. (1) The Commission may on an application made in such form and on payment of such fee, as may be prescribed, grant a licence authorising any person to,-

(a) transmit electricity in a specified area of transmission; or

(b) supply electricity in a specified area of supply including bulk supply to licensees or any person.

(2) In respect of the grant of any such licence the following procedure shall be followed namely: -

(a) any person applying for a licence shall publish a notice of his application in such manner, and with such particulars as may be prescribed by the Commission within 14 days after making the application;

(b) the Commission shall not grant a licence until,-

(i) all objections received relating to the application for the licence have been considered by the Commission; provided that no objection shall be considered by the Commission unless it is received within three months of the date of the first publication of the notice under clause (a) above; and

(ii) in the case of an application for a licence to supply or transmit in an area which includes the whole or part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of' any building or place in the occupation of the Central Government for defence purposes, the Commission shall ascertain whether there is any objection to the grant of the licence on the part of the Central Government;

(c) where an objection is received from any local authority concerned, the Commission shall, if in its opinion the objection is insufficient, record in writing and communicate to such local authority its reasons for such opinion; and

(d) no application for a licence shall be made by any local authority except pursuant to a resolution passed at a meeting of such authority held after one month's previous notice of the same specifying the purpose thereof has been given in the manner in which notices of meetings of such local authority are usually given.

(3) A licence shall prescribe the duration, extent to which and the terms and conditions under which the transmission or supply of energy is to be made and contain such other conditions as the Commission may consider appropriate for achieving the purposes of the Act.

(4) Without prejudice to the generality of sub-section (3), the conditions included in a licence by virtue of that sub-section may require the licensee to,-

(a) enter into agreements on specified terms with other persons for the use of any electric lines, electrical plant or plants and associated equipment operated by the licensee;

(b) comply with any direction given by the Commission;

(d) refer all disputes arising under the licence for determination by the Commission;

(e) furnish information, documents and details which the Commission may require for its own purpose or for the purposes of the Central or State Government or Central Electricity Authority;

(f) comply with the requirements of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 or rules framed there under in so far as they are applicable;

(g) undertake such functions and obligations of the Andhra Pradesh State Electricity Board under the provisions of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 as the Commission may prescribe;

(h) obtain the approval of the Commission of such things that are required under the licence conditions or for deviation from the same;

(i) notify the Commission of any scheme that he is proposing to undertake including the schemes in terms of the provisions of the Electricity (Supply) Act, 1948;

(j) purchase power in an economical manner and under a transparent power purchase process; and

(k) supply in bulk to other licensees or to customers.

(5) Without prejudice to the generality of sub-section (3), the conditions included in a licence granted by the Commission may require the holder of such a licence to establish a tariff or to calculate its charges from time to time in accordance with the requirements prescribed by the Commission.

(6) The provisions contained in the Schedule to the Indian Electricity Act, 1910 shall be deemed to be incorporated with, and to form part of every supply licence granted under this Part save in so far as they are expressly varied or excepted by the supply licence and shall, subject to any such additions, variations or exceptions which the Commission is empowered to make having regard to the purposes of the Act, apply to the undertaking authorised by the licence in relation to its activities in the State:

Provided that where a supply licence is granted by the Commission for the supply of energy to other licensees for distribution by them, then in so far as such licence relates to such supply, the provisions of clauses IV, V, VI, VII, VIII and XII of the said Schedule shall not be deemed to be incorporated within the supply licence.

(7) The conditions included in a licence may contain provision for the conditions to cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined by or under the conditions.

(8) Any provisions included by virtue of sub-section (7) above in a licence shall have effect in addition to the provision made by sub-section (5) of section 18 and section 19 with respect to the amendment of the conditions of a licence.

(9) Unless indicated in the terms of a licence, the grant of a licence under this section to a person shall not in any way hinder or restrict the grant of a licence to another person within the same area of supply for a like purpose and accordingly the licensee shall not claim any exclusivity.

(10) The licence granted by the Commission in terms of this Act may provide that the licensee shall have the powers and authority to take appropriate actions for revenue realisation, prosecution for theft, meter tampering, diversion of electricity, and all such and similar matters affecting the distribution and supply of electricity to the consumer.

(11) The Commission shall be entitled to authorise the licensees and persons to exercise such power and authority as the licensees and persons could be given under the provisions of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948.

Exemption from the requirement to have a licence

16. (1) The Commission may make regulations to grant exemption from the requirement to have a supply licence, but subject to compliance with such conditions if any, as may be specified in the order:

Provided that the Commission shall not, under any such regulation, grant any exemption except with the consent,-

(i) of the local authority, if any, constituted in the area where energy is to be supplied;

(ii) in any case where energy is to be supplied in any area forming part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or any building or place in the occupation of the Central Government for defence purposes, of the Central Government;

(iii) in any area falling within the area of supply of a licensee, of that licensee:

Provided that, except in a case falling under clause (ii) no such consent shall be necessary if the Commission is satisfied that such consent has been unreasonably withheld.

(2) An exemption may be granted,-

(a) to persons of a particular category; or

(b) to a particular person; or

and an exemption to persons of a particular category or to a particular person shall be published in such manner as the Commission considers appropriate for bringing it to the attention of that person or persons of that category and of the public in general.

(3) The exemption granted may be revoked by the Commission at any time for reasons to be recorded in writing.

(4) An exemption, unless previously revoked, shall continue in force for such period as may be specified in or determined by or under the exemption.

(5) Every regulation or exemption made by the Commission under this Act shall be published in the Official Gazette.

General duties and powers of the licensees

17. (1) It shall be the duty of the holder of a supply licence or a transmission licence in respect of a particular area to develop, maintain and provide to the consumers or the licensees as the case may be or any other person an efficient, co-ordinated and economical system of electricity supply or transmission in the area of transmission or area of supply, as the case may be.

(2) Each licensee and Generating Company in discharge of its duties shall comply with the provisions of the regulations framed from time to time governing the terms and conditions for the operation and maintenance of power system and electric supply lines.

(3) Subject to sub-section (4) of section 12 and sections 13 to 19 of the Indian Electricity Act, 1910 (Which relate to the carrying out of works) shall have effect in relation to a person authorised by a licence under this Act to transmit or supply electricity as if he is a licensee in that Act.

(4) Where any of the sections mentioned in sub-section (3) above is applied to a licence holder by his licence, it shall have effect subject to such restrictions, exceptions and conditions as may be included in the licence.

Revocation of licence

18. (1) The Commission may inquire into the conduct or functioning of any licensee in carrying out the obligations under the Act or rules or regulations framed there under or the terms and conditions of its licence,-

(a) upon receiving a complaint from any consumer or consumer association or any trade association; or

(b) upon a reference made to it by the State Government or by the Central Government or the Central Electricity Authority; or

(c) upon receiving a complaint from any company or person involved in the generation, transmission, distribution or supply of electricity; or

(d) upon its own knowledge or information derived from any source.

(2) Upon making such inquiry the Commission may, if in its opinion the

public interest so requires, revoke a licence in any of the following cases, namely:-

(a) where the licensee, in the opinion of the Commission, has committed a wilful or unreasonable default in doing anything required of him by or under this Act, the Indian Electricity Act, 1910, or the Electricity (Supply) Act, 1948, or rules made there under to the extent applicable in the State read with the provisions of this Act;

(b) where the licensee commits a breach of any of the terms and conditions of his licence the breach of which is expressly declared by such licence to render it liable to revocation.

(c) where the licensee fails within the period specified in his licence or any longer period which the Commission may allow by order,-

(i) to show, to the satisfaction of the Commission, that he is in a position to fully and efficiently discharge the duties and obligations imposed on him by his licence; and

(ii) to make the deposit or furnish the security required by his licence; and

(d) where in the opinion of the Commission the financial position of the licensee is such that he is unable to fully and efficiently discharge the duties and obligations imposed on him by his licence.

(3) Notwithstanding the provisions of sub-section (1) and (2) where in its opinion the public interest so requires, the Commission may, on the application or with the consent of the licensee, and if the licensee is not a local authority, after consulting the local authority concerned, if any, revoke a transmission or supply licence as to the whole or any part of the area of transmission or supply upon such terms and conditions as it thinks fit.

(4) No licence shall be revoked under sub-section (2) or (3) unless the Commission has given to the licensee not less than three months notice in writing stating the grounds on which it is proposed to revoke the licence and has considered any cause shown by the licensee within the period of that notice, against the proposed revocation and has given reasons for such revocation.

(5) The Commission may, instead of revoking the licence, permit it to remain in force subject to such further terms and conditions as it thinks fit to impose and any further terms or conditions so imposed shall be binding upon, and be observed by, the licensee, and be of like force and effect as if they were contained in the licence.

Amendment of licence

19. (1) The Commission may, where in its opinion the public interest so permits or requires, on the application of the licensee and if the licensee is not a local authority, on the application of the local authority concerned or otherwise on its own may make such alterations and amendments to the terms and conditions of a licence as it thinks fit taking into account the objects and purposes of the Act:

Provided that no such alterations or amendments, other than an alteration or amendment pursuant to a licence condition referred to in sub-section (7) of section 15 or subsection (5) of section 18 shall be made except with the consent of the licensee.

(2) Where the licensee has made an application under sub-section (1) proposing any alterations or amendments in his licence, the following provisions shall apply,-

(a) the licensee shall publish a notice of the application in the manner and with the particulars as may be prescribed by the Commission;

(b) the Commission shall not make any alterations or amendments until all objections received by it with reference to the application within three months from the date of the first publication of the notice have been considered; and

(c) in the case of an application proposing alterations or amendments in an area of supply comprising the whole or any part of the cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the occupation of the Central Government for defence purposes, the Commission shall not make any alterations or amendments except with the consent of the Central Government.

(3) Before making any alterations or amendments in a licence otherwise

than on the application of the licensee, the Commission shall publish the proposed alterations or amendments and consider all objections received by it with reference to the proposed alterations or amendments within three months from the date of the first publication of the notice.

Provisions where licence is revoked

20. (1) Notwithstanding the provisions of sections 6 and 7 of the Indian Electricity Act, 1910 where the Commission revokes a licence, under sub-section (2) of section 18, the following provisions shall apply:-

(a) the Commission shall serve a notice of revocation upon the licensee and shall fix a date on which the revocation shall take effect. With effect from that date or with effect from the earlier date on which the undertaking of the licensee is sold to a purchaser in pursuance of any of the provisions of this Act, all the rights, duties, obligations and liabilities of the licensee under this Act shall absolutely cease and determine except for any liabilities that have accrued to that date;

(b) the Commission shall invite applications for acquiring the undertaking of the licensee whose licence has been revoked and determine terms and conditions of the sale of the undertaking;

(c) the Commission may, by notice in writing, require the licensee to sell, and thereupon the licensee shall sell the undertaking to the person whose application has been accepted by the Commission. Such person is referred to in this section as the "purchaser"; and

(d) the Commission may make such interim arrangement in regard to the undertaking of the licensee for maintaining the electricity transmission and supply as may be considered appropriate including the appointment of administrators and special directors for the undertaking.

(2) Where an undertaking is sold under sub-section (1), the purchaser shall pay to the licensee the purchase price of the undertaking determined in accordance with the application submitted by the purchaser.

(3) Where the Commission issues any notice under sub-section (1) requiring the licensee to sell the undertaking, it may by such notice require the licensee to deliver, and thereupon the licensee shall deliver on a date specified in the notice, the undertaking to the designated purchaser pending the payment of the purchase price of the undertaking. Any pending fines and charges shall be deducted from the amounts payable to the licensee:

Provided that in any such case, the purchaser shall pay to the licensee interest at such rate not less than the Reserve Bank lending rate ruling at the time of delivery of the undertaking as the Commission may decide, on the purchase price of the undertaking for the period from the date of delivery of the undertaking to the date of payment of the purchase price.

(4) Where before the date fixed in the notice issued under clause (a) of sub-section (1) as the date on which the revocation of the licence shall take effect, no notice has been issued to the licensee requiring him to sell the undertaking or where for any reason no sale of the undertaking has been effected under that sub-section, the State Government shall acquire the undertaking on the date of revocation of the licence and shall pay to the licensee an amount determined in accordance with sub-section (1) and (2) of section 7-A of the Indian Electricity Act, 1910, as amended in the State and shall perform all the obligations of the licensee until such time as the State Government is able to sell the undertaking to a new license which it shall endeavour to do expeditiously without undue delay.

(5) The Licensee shall duly implement the orders of the Commission, notwithstanding that the licensee may be aggrieved by the order of the Commission and intends to take legal action challenging the orders of the Commission.

Restrictions on licensees and generating companies

21. (1) No licensee or Generating Company shall at any time, without the previous consent in writing of the Commission, acquire by purchase or otherwise the licence or the undertaking of, or associate himself with, so far as the business of generating, transmitting distribution or supply of energy is concerned, any other licensee or person generating, transmitting, supplying or intending to generate, transmit or supply electricity:

Provided that before granting the consent the Commission shall hear such person or authority as the Commission shall consider appropriate.

(2) The licensee shall not, at any time, assign his licence or transfer his undertaking, or any part thereof, by sale, mortgage, lease, exchange or otherwise without the previous consent in writing of the Commission.

(3) The provisions of section 44 of the Electricity (Supply) Act, 1948

shall apply except that the persons to whom the section applies shall be required to obtain the sanctions and consents from the Commission, instead of such sanctions and consents to be obtained from the Board as provided under that section.

(4) A holder of a supply or transmission licence may, unless expressly, prohibited by the terms of its licence, enter into arrangements for the purchase of electricity from,-

(a) the holder of a supply licence which permits the holder of such licence to supply energy to other licensees for distribution by them; and

(b) any person or Generating Company with the consent of the

Commission.

(5) Any agreement relating to any transaction of the nature described in sub-sections (1), (2), (3) or (4) unless made with, or subject to such consent as aforesaid, shall be void.

Annual accounts of licensee

22. Every licensee shall, unless expressly exempted by the licence, prepare and render to the Commission every year on or before the date specified in the licence, an annual statement or statements of accounts of its undertaking and of each separate business unit as specified in the licence made up to such date, in such form and containing such particulars, as may be set out in the licence. It shall be a term of the licence that such statements shall be published in manner prescribed in the regulations.

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