22 June 2015

Electricity supply without a distribution license, when valid

The Appellate Tribunal for Electricity has upheld the Order of the State Commission wherein the latter has allowed the system for supply of power by the generating company to its individual industrial consumers directly from its dedicated transmission lines considering the load centre as a consumer under Section 10(2), read with Section 42(2) of the Electricity Act 2003, without obtaining any distribution license.
The argument of the distributing company that supply of electricity by generating company under Section 10(2) cannot be put at par with the activity of distribution licensee was hence rejected by the Tribunal in this regard. The Tribunal was of the view that supply of electricity through shared dedicated transmission line would not amount to distribution of electricity.

Relying on another 2008 decision, Tribunal rejected the contention of the distribution licensee that if there is more than one consumer, then the supply of power amounts to distribution requiring distribution license.
Tribunal in this case (Dakshin Haryana Bijli Vitran Nigam Ltd. v. Toshiba Corporation ) decided on 29-5-2015 also noted that the Commission in its impugned order had made proper arrangement to ensure that the distribution licensee would be properly compensated through the payment of cross subsidy surcharge and additional surcharge.


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