The Electricity Act, 2003

The Government of India has enacted a comprehensive legislation in the form of The Electricity Act, 2003 which attempts to impart renewed thrust to co-ordinated development of the power sector in the country, provides a comprehensive yet flexible legislative framework for power development and envisions a sector characterized by a competitive market in power where the regulators and the power utilities play increasingly significant roles.

The Electricity Act, 2003 lays a clear roadmap for following major transformations in the electricity sector. The main objectives of the Act are:

• Distancing the government from the day-to-day activities of the business of supply of electricity;
• Complete removal of licensing constraints from generation;
• Providing an environment that encourages competition by allowing power trading and open access;
• Encouraging private sector participation;
• Obviating the need to enact separate electricity reform laws in each State;
• Provide enabling provisions for rationalizing tariffs;
• Stipulate adaptations of transparent policies with regards to subsidies by the States;
• With this legislation in place, the stage has been set for various states to implement the reforms in their respective utilities and enhance their attractiveness for private sector investments.

The Gujarat Industry (Reorganisation and Regulation) Act, 2003.

The Govt. has enacted the Gujarat Electricity Industry (Reorganisation & Regulation) act in May 2003. The act aimed to provide for reorganisation and rationalisation of electricity industry in the state and for establishing an Electricity Regulatory Commission in the state for regulating the electricity industry and all other in related aspects.

• The salient features of the Act are as under:
• Reorganisation of the Gujarat Electricity Board.
• Empowering state regulator to become nodal agency for regulating the industry in Gujarat, determining tariff, wheeling charges, surcharge etc.
• Defining role of State Government
• Aligning tariffs towards cost of supply.