Lok Sabha Question No. 109 (STARRED), answered on 2016-03-03
Subject: Effective Implementation of Electricity Act, 2003
Ministry: POWER
Asked by: LAXMI NARAYAN YADAV, PRATAPRAO GANPATRAO JADHAV

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA STARRED QUESTION NO.109 TO BE ANSWERED ON 03.03.2016

EFFECTIVE IMPLEMENTATION OF ELECTRICITY ACT, 2003

†*109. SHRI LAXMI NARAYAN YADAV: SHRI PRATAPRAO JADHAV:

Will the Minister of POWER be pleased to state:

(a) whether  the  Government  is  satisfied  with  the  implementation  of Electricity  Act,  2003,  as  amended  from  time  to  time,  if  so,  the  details thereof;

(b) the  extent  to  which  healthy  competition  has  been  brought  in  the power sector as a result thereof;

(c) whether  the  instances  of  violation  of  norms  stipulated  in  the Electricity  Act,  2003  to  create  a  competitive  environment  has  been reported, if so, the details thereof;

(d) whether the Government has inquired about the enforcement of the said provision in various States including Delhi, if so, the details thereof; and

(e) the corrective steps taken by the Government in this regard?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL AND NEW & RENEWABLE ENERGY

( SHRI  PIYUSH GOYAL )

(a) to (e) : A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  STARRED QUESTION  NO.    109  TO  BE  ANSWERED  IN  THE  LOK  SABHA  ON  03.03.2016 REGARDING EFFECTIVE IMPLEMENTATION OF ELECTRICITY ACT, 2003.

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(a) & (b) : Yes,  Madam,  Government  of  India  has  enacted  the  Electricity  Act, 2003  to  consolidate  the  laws  relating  to  generation,  transmission,  distribution, trading  and  use  of  electricity  and  generally  for  taking  measures  conducive  to development of electricity industry and for protecting interest of consumers.

With  de-licensing  of  generation  (except  through  hydro  projects) through the Electricity Act, 2003, the power sector has witnessed multiplicity of players  in  the  segment.    The  Transmission  capacity  has  also  increased  with participation of Private Sector.

Further,  as  per  the  Electricity  Act  2003,  Regulatory  Commissions have  been  empowered  to  frame necessary Regulations to implement  the provisions of the Electricity Act, 2003. Central Electricity Regulatory Commission (CERC)  and  State  Electricity  Regulatory  Commission  (SERCs)/Joint  Electricity Regulatory Commission (JERC) have framed the necessary Regulations required in the Act. Power Market has been developed by the Central Commission as per the  mandate  under  the  Act.  During  the  year  2014-15,  through  Indian  Energy Exchange (IEX) and Power Exchange India Limited (PXIL), Open Access consumers under Day-Ahead market, have transacted a volume of 12084.18 MU and  102.95  MU  respectively.  The  trading  licensees  and  the  power  exchanges authorized by the Commission have brought in the desired competition in power sector.

(c) : Open Access is one of the cornerstones of the Electricity Act, 2003 to facilitate supply of electricity from the surplus region to deficit region and to tap the source of electricity such as captive generation and renewable generation.  State  commission  have  been  empowered to  permit  open  access  on the  existing  Distribution  Licensees  network  on  payment  of  surcharges  and wheeling charges. However, some instances of denial of open access have been brought  before  the  Commissions.  Some  State  Governments  have  issued  orders under section 11 of the Electricity Act, 2003 restricting flow of electricity beyond their boundaries. The Commissions have taken action in line with the provisions of the Act. In some cases the issue is sub-judice.

……….2.

(d) & (e) : The Electricity being a concurrent subject, the provisions of the Act provides for the functions and responsibilities of the Central and State Governments as well as different statutory bodies and entities defined under the Act.  The Central Government has been pursuing with the State Governments at various fora for implementation of various provisions of the Electricity Act, 2003 from time to time. As per information provided by DERC, there is no instance of violation of norms observed as stipulated in the Electricity Act, 2003 to create a competitive environment in Delhi.

Though,  there  have  been  impressive  achievement  in  the  areas  of augmentation  of  generation  capacity,  establishment  of  National  Grid,  a  multilayered regulatory  framework, private sector participation, development  of electricity markets and exchanges and restructuring of State Electricity Boards, still there is a need to review the provisions keeping in view the overall objectives of  the  said  Act  to  bring  in  further  competition  and  efficiency.  Accordingly, Electricity  (Amendment)  Bill,  2014  was  introduced  before  the  Lok  Sabha  on 19.12.2014. The Bill was then referred to Parliamentary Standing Committee on Energy. The Committee, after detailed examination, has submitted its report on 07.05.2015.  Based  on  the  recommendation  of  Standing  Committee,  the  revised Electricity (Amendment) Bill, 2014 is being finalized.

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