Comparison of the changes made in Section 2 in the Electricity Act 2003 and Draft of

Electricity Act 2018

Section 2- (Definitions)

The definition of Appellate tribunal given in Section 2(1) is changed from “Appellate
Tribunal” means the Appellate Tribunal for Electricity established under section 110. To
“Appellate Tribunal" means the Appellate Tribunal for Energy established under section 110.
And further Sub -Section 1A is added which defines “Ancillary Support” as in relation to power
system or grid operation, means the support required, by the load dispatch centers, for the power
system or grid operation for maintaining power quality, reliability and security of the grid.

The definition of Area of supply given in Section 2(3) is changed from "area of supply”
means the area within which a distribution licensee is authorized by his license to supply
electricity; To "area of supply” means the area within which a distribution licensee till the
effective date of transfer scheme notified under section 131 A or supply licensee, is authorized
by his license to supply electricity; And further Sub-Section 3A “area of distribution” means the
area within which a distribution licensee is authorized by his license to distribute electricity.

The definition of “Captive generating plant” given in Section 2(8) is changed from “Captive
generating plant” means a power plant set up by any person to generate electricity primarily for
his own use and includes a power plant set up by any co-operative society or association of
persons for generating electricity primarily for use of members of such cooperative society or
association, To “Captive generating plant" means a power plant set up by any person to generate
electricity primarily for his own use and includes a power plant set up by any co-operative
society or association of persons for generating electricity primarily for use of members of such
co-operative society or association subject to such other conditions as may be prescribed by the
Central Government from time to time.

In the definition of Consumer given in Section 2(15) Sub-section 15A is added which talks
about “decentralized distributed generation” in the Draft of Electricity Act 2018 which means
electricity generation from wind, small hydro, solar, biomass, biogas, bio fuel, any kind of waste
including municipal and solid waste, geothermal, hybrid power system or such other sources as
may be notified by the Central Government from time to time for end use at or near the place of
generation.

The definition of “Dedicated transmission lines” given in Section 2(16) is changed from
“dedicated transmission lines" means any electric supply-line for point to point transmission
which are required for the purpose of connecting electric lines or electric plants of a captive
generating plant referred to in section 9 or generating station referred to in section 10 to any
transmission lines or sub-stations or generating stations, or the load centre, as the case may be,
To "dedicated transmission lines" means any radial electric supply-line for point to point
transmission which is required for the purpose of connecting a captive generating plant or
generating station referred to any transmission lines or distribution system or sub-stations or
switching station or any other captive Generating Plant or generating stations, or the load centre,
as the case may be, dedicated for evacuating the electricity generated from such Captive Power
Plant or Generating Station and shall not be used for any other purpose subject to the condition
that such line shall not form a loop with the grid and shall not be shared except with the prior
approval of the Appropriate Commission, except where authorized for additional connections for
redundancy purposes or improved transmission.

The definition of “Distribution licensee” given in Section 2(17) is changed from "distribution
licensee" means a licensee authorised to operate and maintain a distribution system for supplying
electricity to the consumers in his area of supply, To "distribution licensee" means a licensee
authorised to operate and maintain a distribution system for enabling supply of electricity to the
consumers in his area of distribution and shall be deemed supply licensee till transfer scheme is
notified as provided in Section 131A of this Act, And further Sub-section (17A) “distribution”
means the conveyance of electricity by use of distribution system and the expression “distribute”
shall be construed accordingly.

The definition of “Electricity” given in Section 2(23) is changed from "electricity" means
electrical energy- (a) generated, transmitted, supplied or traded for any purpose; or (b) used for
any purpose except the transmission of a message; To electricity" means electrical energy-- (a)
generated, transmitted, distributed, supplied or traded for any purpose; or (b) used for any
purpose except the transmission of a message.
The definition of “Franchisee” given in Section 2(27) is changed from “franchisee means a
persons authorised by a distribution licensee to distribute electricity on its behalf in a particular
area within his area of supply, To “franchisee" means a person authorized by a distribution
licensee or a supply licensee, as the case may be, to undertake distribution or supply of electricity
in a specified area on its behalf within his area of distribution or area of supply of the license.

The definition of “Local authority” given in Section 2(41) is changed from “local authority”
means any Nagar Panchayat, Municipal Council, municipal corporation, Panchayat constituted at
the village, intermediate and district levels, body of port commissioners or other authority legally
entitled to, or entrusted by the Union or any State Government with, the control or management
of any area or local fund; To "local authority" means any urban local body / rural local body or
body of port commissioners or other authority entrusted by the Union or any State Government
with the control or management of any area or local fund; and further Sub-section 41A is added
which talks about “long term” means the duration of power purchase which shall be as notified
by the Central Government.

There are some important sub-sections which are added in this section in the Draft of
Electricity act 2018 they are defined below:

(57A) “renewable energy sources” for the purposes of this Act, means the hydro, wind, solar,
bio-mass, bio-fuel, bio-gas, waste including municipal and solid waste, geothermal, tidal, forms
of oceanic energy, co-generation from the sources mentioned herein above and such other
sources as may be notified by the Central Government from time to time. Renewable energy
sources shall include the ability to be delivered via a storage system and shall remain classified
as renewable energy sources, without need for further licensing or regulation. This is only
applicable for storage systems solely connected to renewable energy sources, even if owned or
operated by a third party; Explanation. -For the purposes of this clause, the expression “hydro”
means hydro generating stations of capacity not exceeding the capacity notified by the Central
Government for this purpose.

(57B) “Renewable Energy Service Company” means an energy service company which provides
renewable energy to the consumers in the form of electricity for the purposes of this Act;.
(57C) “Renewable Purchase Obligation” means such minimum percentage of the purchase of
electricity from Renewable Energy Sources to be procured by every obligated entity in a manner
as may be prescribed by the respective Commission from time to time.

(61A) “Smart Grid” means an electricity network that uses information and communication
technology to gather information and act intelligently in both an automated manner and with
increased information to improve the efficiency, reliability, economics, and sustainability of
generation, transmission and distribution of electricity as may be specified by the Authority.