Schedule 1
Licensed ActivityThe following transmission systems and transmission corridor as detailed below, in the state of Tamil Nadu, including cantonment, aerodrome, fortresses, arsenal, dockyard or camp or any building or place in occupation of Central Government for defence purposes and without however affecting the rights of any other Licensee or exemption holder, as the case maybe, under the Electricity Act. 2003 and subject to the conditions of licence agreed upon.Annexure 7Form No. 6Format and Conditions of Distribution Licence Licence Granted for Distribution of Electricity[See Regulations 15(3)]Licence granted by the Tamil Nadu Electricity Regulatory Commission under section 14 of the Electricity Act, 2003 (36 of 2003) to, for carrying on the business of distribution of electrical energy within the area of activity (as specified under 'licensed area of distribution licensee' in the schedule) and shall be subject to the terms and conditions specified herein. The licence shall come into force from.Part-I Definitions1. Words, terms and expressions to which meanings are assigned by the electricity Act 2003 (36 of 2003) (hereinafter called the 'Act'), shall have the same meaning in these General Conditions.
2. Unless the context otherwise requires, in these General conditions:
(a)"accounting statement" means for each financial year, accounting statements for the licensed business comprising a profit and loss account, a balance sheet and a statement of sources and application of funds, together with notes thereto as detailed under the Companies Act, 1956 (Act 1 of 1956) or the respective Acts under which the licensee is governed and such other particulars and details in the manner as the Commission may prescribe from time to time. If the licensee engages in any other business or activity in addition to the licensed business, the accounting statements shall comply with the regulations of the Commission dealing with the treatment of other business of distribution licensees and show the amounts of any revenue, cost, asset, liability, reserve or provision, which has been either:(i)charged from the licensed business to any other business or vice versa together with a description of the basis of that charge; or(ii)determined by apportionment or allocation between the licensed business and any other business of the licensee together with a description of the basis of the apportionment or allocation.However, The Tamil Nadu Electricity Board, which is a deemed licensee under proviso to section 14 of the Act shall continue to maintain the accounts in accordance with Electricity (Supply) Annual Accounts Rules 1985 till these rules are rescinded or modified or such deemed licensees are reorganised under section 131 of the Act. ?(b)"Act" means the Electricity Act, 2003 (Act 36 of 2003)(c)"annual accounts" means the accounts of the licensee prepared in accordance with the provisions of the Companies Act, 1956 (Act 1 of 1956) and/or in such other manner as may be directed by the Commission in terms of the provisions of the Act;(d)"area of activity" or area of distribution" or "area of supply" means the area stated in the schedule to the licence within which the licensee is authorised to establish, operate and maintain distribution lines and to distribute and supply electricity;(e)"Auditors" means the licensee's auditors holding office in accordance with the requirements of sections 224 to 234A or section 619, of the Companies Act 1956 (Act 1 of 1956) as the case may be;(f)"authorised", in relation to any person, business or activity, means authorised by licence granted under section 14 of the Act or deemed to be granted under the first, second, third and fifth provisos to section 14 of the Act;(g)"Commission" means the Tamil Nadu Electricity Regulatory Commission;(h)"distribution" means the conveyance of electricity by means of a distribution system;(i)"distribution business" means authorised business of the licensee to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply;(j)"distribution licensee" means a licensee authorised to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply;(k)"distribution system" means the system of wires and associated facilities between delivery points on the transmission lines Or the generating station connections and the point of connection to the installation of the consumers;(l)"distribution system operating standards" means the standards as specified by the Commission in the Tamil Nadu Electricity Regulatory Commission Tamil Nadu Electricity Distribution Standards of Performance Regulations, 2004 and the Tamil Nadu Electricity Grid code.(m)"franchisee" means a person authorised by a distribution licensee to distribute electricity on its behalf in a particular area within his area of supply;(n)"Force Majeure" means events beyond the reasonable control of the licensee, including, but not limited to earthquakes, cyclones, floods, storms, adverse weather conditions, war, terrorist attacks, civil commotion or other similar occurrences that leads to any act that would involve a breach of relevant laws or regulations concerned with electrical safety;(o)"generating station" means any station for generating electricity, including any building and plant with step-up transformer, switchgear, switchyard, cables or other appurtenant equipments, if any used for that purpose and the site thereof; the site intended to be used for a Generating Station, and any building used for housing the operating staff of a Generating Station, and where electricity is generated by water-power, includes penstocks, head and tail works, main and regulating reservoirs, dams and other hydraulic works, but does not in any case include any sub-station;(p)"holding company" shall have the same meaning as assigned to it under the Companies Act, 1956 (Act 1 of 1956);(q)"licence" means the distribution licence under section 14 of the Act under which the licensee is authorised to conduct the licensed business;(r)"licensee" means any person, who has been granted this licence under section 14 of the Act;(s)"licensed business" means the business of distribution of electricity in the area of activity as authorised under this licence;(t)"Open Access" means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Commission;(u)"operational control" means possessing the authority to make operational decisions such as commissioning and utilisation of units, service lines and equipments; *•(v)"other business" means any business of the licensee other than the licensed business for optimum utilisation of its assets;(w)"person" shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person;(x)"subsidiary" shall have the same meaning as in section 4 of the Companies Act 1956 (Act! of 1956);(y)"sub-station" means a station for transforming or converting electricity for the transmission or distribution thereof and includes transformers, converters, switchgears, capacitors, synchronous condensers, structures, cables and other appurtenant equipments and any buildings used for that purpose and the site thereof;(z)"supply" in relation to electricity means the sale of electricity to a licensee or consumer;(aa)"Tamil Nadu Electricity Distribution Code" means the Code published by the Commission under sections 46 and 86 of Act;(ab)"Tamil Nadu Electricity Supply Code" means the Code published by the Commission under section 50 of the Act;(ac)"trader" means a person who has been granted a licence to undertake trading in electricity under section 14 of the Act;(ad)"trading" means the purchase of electricity for resale thereof and the expression "trade" shall be construed accordingly;(ae)"trading business" means the authorised business of the trading licensee in the licensed area of activity;(af)"trading licensee" means the person who is authorised to undertake trading and shall include deemed licensee who is so authorised under section 14 of the Act;(ag)"transfer" shall include the sale, exchange, gift, lease, licence, loan, securitisation, mortgage, charge, pledge or grant of any other encumbrance or otherwise permitting of any encumbrance to subsist or parting with physical possession or any other disposition or dealing;(ah)"transmit" means conveyance of electricity by means of transmission lines and the expression "transmission" shall be construed accordingly;(ai)"transmission lines" means all high pressure cables and overhead lines (not being an essential part of the distribution system of a licensee) transmitting electricity from a generating station to another generating station or a sub-station, together with any step-up and step-down transformers, switch-gear and other works necessary to and used for the control of such cables<«or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switch- gear and other works;(aj)"transmission system" means the system consisting mainly of extra high voltage electric lines having design voltage of 33 kV and higher, owned or controlled by the transmission licensee, and used for the purposes of the conveyance of electricity and includes all bays/equipments up to the interconnection with the distribution system, and any plant, apparatus and meters owned or used in connection with the transmission of electricity, but shall not include any part of a distribution system;(ak)"use of system" means use of the distribution system for the transportation and wheeling of electricity for any person pursuant to a contract entered into with the distribution licensee.(al)"users" means anyone who uses the distribution system.(am)"wheeling" means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the case may be, are used by another person for the conveyance of electricity on payment of charges stipulated by the Commission under the Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for the Determination of Tariff) Regulations, 2005;Part-II GeneralConditions3. Term of the Licence. - The distribution licence shall come into force on the date specified^y the Commission in the order granting such licence and unless revoked earlier, in accordance with the provisions of Regulation 20 of these regulations or under section 19 of the Act, shall remain in force for 25 (Twenty five) years from that date.
4. Compliance with Laws, Rules and Regulations. - (1) The distribution licensee shall comply with the provisions of the Act, rules, regulations, orders and directions issued by the Commission from time to time.
(2)The distribution licensee shall act in accordance with this General Conditions except where the licensee is exempted from any provisions of these General Conditions at the time of the grant of licence or otherwise specifically permitted by the Commission for any deviation therefrom.(3)The distribution licensee shall duly comply with the order and directions of the National Load Despatch Centre, Regional Load Despatch Centre and the State Load Despatch Centre and other statutory authorities issued in the discharge of their functions.5. Duties of the Distribution Licensee. - (1) The distribution licensee shall duly discharge the duties of the distribution licensee as provided under section 42 and 43 of the Act.
(2)The distribution licensee shall develop and maintain an efficient, co-ordinated and economical distribution system in the area of distribution and effect supply of electricity to Consumers in such area of distribution in accordance with the provisions of the Act, rules, regulations, orders and directions of the Commission.(3)The distribution licensee shall be entitled to:(a)purchase, import or otherwise acquire electricity from generating company, trader and from such other sources and persons with whom the distribution licensee has agreements or arrangements of power purchase or procurement of energy in accordance with the terms and conditions of such agreement and arrangement as consented to or approved by the Commission;(b)purchase or acquire electricity from any person whose generating unit existing as on date of the grant of the distribution licence, is directly connected to and interfaced with the distribution system of the licensee, provided that the licensee shall intimate the Commission of the existing arrangements for such purchase or acquisition of electrical energy and obtain the general or special approval of the Commission;(c)purchase from renewable sources connected to its distribution system in such quantum as may be stipulated by the Commission under section 86 (1) (e) of the Act.(d)purchase or otherwise acquire electricity from any person or licensee on the tariffs and terms and conditions as approved by the Commission;(e)undertake trading in electricity in its area of distribution without the need for a separate trading licence;(f)sell electricity or energy capacity contracted for such period and to such extent of electricity or capacity is not required by the distribution licensee for the discharge of his obligations to supply electricity in his area of supply.(g)supply to such persons situated within its area of supply and requiring supply of electricity from a generating company or any licensee other than the distribution licensee in accordance with regulations made by the Commission. The licensee with respect to such supply shall be of a common carrier providing non-discriminatory open access.(4)The distribution licensee shall not, without the general or special approval of the Commission:(a)Sell or supply electricity to any person, other than pursuant only in accordance with this licence, and on the tariffs and terms and conditions as approved by the Commission; or(b)provide wheeling services to third parties for transportation of electricity through the licensee's distribution system in accordance with the regulations made by the Commission; and where the Commission permits a consumer or class of consumers to receive electricity supply from a person other than the licensee of his area of supply, such consumer shall be liable to pay an additional surcharge on the charges of wheeling as may be stipulated by the Commission in the open access regulation; or(c)undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any other licensee within the State; or(d)merge his utility with the utility of any other licensee or his own elsewhere within the State; or(e)assign his licence or transfer his utility or part thereof to any person by sale, lease, exchange or otherwise.(5)Save as in the case of the consumers of the distribution licensee and persons authorised by the Commission, the licensee shall not commence any new provision of services to any other licensee or person not authorised by the Commission for the conveyance of electricity through its distribution system, without informing the Commission seven days prior to the commencement of such arrangement. In circumstances requiring immediate remedial action in the interest of continuity of supply to the persons other than the consumers, the licensee may commence the activity referred to in this clause, provided that the licensee will inform the Commission of such occurrence or circumstances within seven days thereof.(6)The distribution licensee shall purchase the energy required for meeting its obligation under its licence in an economical manner and under a transparent power purchase or procurement process and in accordance with the regulations, guidelines, directions made by the Commission from time to time. In case of a shortage of electricity supply, the Commission may fix the maximum and minimum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and the licensee or between licensees for a period not exceeding one year to ensure reasonable prices of electricity for transmission, wheeling and retail sale of electricity.(7)In the event the distribution licensee engages in any other business the same shall be subject to the following conditions:(a)due intimation to the Commission, about the other business the licensee is proposing to engage;(b)the licensed business and the conduct thereof by the licensee is not prejudiced and/or adversely affected in any manner by reason of the other business;(c)at least 50% of its profits earned out of such other business, shall be utilized for reducing the charges for wheeling;(d)the distribution licensee shall prepare and keep, in respect of the other business activities, separate accounting records as would be required to be kept in respect of such activities as if they were carried on by a separate entity, so that the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable(c)undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any other licensee within the State; or(d)merge his utility with the utility of any other licensee or his own elsewhere within the State; or(e)assign his licence or transfer his utility or part thereof to any person by sale, lease, exchange or otherwise.(5)Save as in the case of the consumers of the distribution licensee and persons authorised by the Commission, the licensee shall not commence any new provision of services to any other licensee or person not authorised by the Commission for the conveyance of electricity through its distribution system, without informing the Commission seven days prior to the commencement of such arrangement. In circumstances requiring immediate remedial action in the interest of continuity of supply to the persons other than the consumers, the licensee may commence the activity referred to in this clause, provided that the licensee will inform the Commission of such occurrence or circumstances within seven days thereof.(6)The distribution licensee shall purchase the energy required for meeting its obligation under its licence in an economical manner and under a transparent power purchase or procurement process and in accordance with the regulations, guidelines, directions made by the Commission from time to time. In case of a shortage of electricity supply, the Commission may fix the maximum and minimum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and the licensee or between licensees for a period not exceeding one year to ensure reasonable prices of electricity for transmission, wheeling and retail sale of electricity.(7)In the event the distribution licensee engages in any other business the same shall be subject to the following conditions:(a)due intimation to the Commission, about the other business the licensee is proposing to engage;(b)the licensed business and the conduct thereof by the licensee is not prejudiced and/or adversely affected in any manner by reason of the other business;(c)at least 50% of its profits earned out of such other business, shall be utilized for reducing the charges for wheeling;(d)the distribution licensee shall prepare and keep, in respect of the other business activities, separate accounting records as would be required to be kept in respect of such activities as if they were carried on by a separate entity, so that the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable to such other business activities are separately identifiable from those of the licensed business;(e)the licensed business does not subsidize in any way such other business nor creates encumbrance on its distribution assets in any way to support such other business; and(f)the distribution licensee shall be entitled to give equipments/ materials in its possession on hire or lease provided such arrangement results in optimum utilisation and gainful employment of its assets, provided the licensed business and the conduct thereof by the licensee is not prejudiced and/or adversely affected in any manner. The licensee shall be entitled to sell or dispose off scrap/ unserviceable/ obsolete materials/equipments. The earnings from such activities shall be recognised in the annual revenue requirement petition to be filed by the licensee to the Commission.(8)The distribution licensee shall seek approval of the commission before making any loans to, or issuing any guarantee for any obligation*) f any person, except when made or issued for the purposes of the licensed business. The loans to employees pursuant to their terms of service and trade advances in the ordinary course of business are excluded from the requirement to seek such approval.(9)The distribution licensee may engage any of its subsidiaries or holding company or a subsidiary of such holding company to provide any goods or services to the licensee in connection with the licensed business, subject to the following conditions that:(a)such subsidiaries or holding company does not engage in any business activities which the distribution licensee is prohibited from doing or which such licensee is not entitled to engage in without the prior approval of the Commission.(b)the transaction will be on an arms-length basis and at a value that is fair and reasonable in the circumstances;(c)the transaction will be consistent with any regulations framed by the Commission relating to the provision of goods and services with respect to licensed business; and(d)the distribution licensee will give fifteen days' notice with details of such arrangements to the Commission prior to commencement of the such arrangement.(10)The distribution licensee may establish subsidiaries or associated companies or grant a franchisee or enter into management contracts including appointment of billing agent to conduct or carry out any of the functions, which such licensee is authorised to conduct or carry out under the Act and this licence.Provided always that:(a)any such subsidiary or associated company or franchisees or contractors or agents shall operate under the overall supervision and control of the licensee and upon the terms and conditions of this licence; and(b)the licensee shall have, prior to delegating any function to any such subsidiary or associated company or franchisees or contractor, intimate the Commission for transactions of value of greater than Rs one crore, subject to such conditions as the Commission may stipulate.(c)The distribution licensee shall also be responsible for all actions of the subsidiaries or associated companies or franchisees or agents or contractors and the Commission may require the licensee to terminate the arrangements in case the performance is not to its satisfaction.(11)Where such prior approval is required, the distribution licensee shall file a suitable application with the Commission disclosing relevant facts. The Commission may, within thirty days of the filing of the application, seek further information in support of the application. The Commission shall generally within thirty days of such further information being submitted by such licensee, and where no such further investigation is required, generally within sixty days of the filing of the application, allow the arrangement subject to such terms and conditions or modifications as it considers appropriate or reject the same, for reasons recorded in writing in the order to be issued by the Commission.(12)The distribution licensee shall provide open access to the distribution system for use of the distribution licensees and generating company including the captive generating plant and the consumer subject to operational constraints in the distribution system and subject to payment by the user all applicable tariffs and charges as determined or directed to be charged by any general or special order of the Commission.6. Accounts. - (1) Unless otherwise permitted by the Commission the financial year of the distribution licensee for the purposes of these General Conditions and matters relating to the licensed business shall run from the first of April to the following thirty-first of March.
(2)The distribution licensee shall, in respect of the licensed business and any other business:(a)keep such accounting records as would be required to be kept in respect of each such business so that the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable to the licensed business are separately identifiable in the books of the licensee, from those of other business in which the licensee may be engaged;(b)prepare on a consistent basis from such accounting records and deliver to the Commission(i)the accounting statements;(ii)in respect of the first six months of each financial year, a half yearly profit and loss account, cash flow statement and balance sheet together with such supporting documents and information as the Commission may prescribe from time to time such statements and documents to be published in the manner the Commission may direct from time to time;(iii)in respect of the accounting statements prepared, an auditor's report for each financial year, staling whether in their opinion, these statements have been properly prepared in accordance with this clause and give a true and fair view of the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable to such businesses to which the statements relate; and(iv)a copy of each half yearly profit and loss account not later than three months after the end of the period to which it relates, and copies of the accounting statements and auditor's report not later than six months after the end of the financial year to which they relate.(3)Any person authorised by the Commission shall be entitled to inspect and verify the accounts of the distribution licensee and such licensee shall render all necessary assistance to such person.(4)The distribution licensee shall not normally change the basis of charge or apportionment or allocation of revenues or expenses in relation to the preparation of the accounting statements in respect of a financial year from those applied in respect of the previous financial year, without prior intimation to the Commission. Any change, if proposed, in the basis of charge or apportionment of revenues or expenses shall be consistent with the provisions of the Companies Act, 1956 (Act 1 of 1956) or the respective Acts under which the licensee is governed, the accounting standards or rules and any guidelines issued by the Commission in this regard.(5)Where, in relation to the accounting statements in respect of a financial year, the Licensee has changed the basis of charge or apportionment or allocation from those adopted for the immediately preceding financial year, the licensee shall, if requested by the Commission, (in addition to preparing accounting statements on those bases which it has adopted), prepare such accounting statements on the basis which it applied in respect of the immediately preceding financial year.(6)Accounting statements under sub-clause (2) shall, unless or otherwise approved or directed by the Commission:(a)be prepared and published with the annual accounts of the distribution licensee, in the manner provided herein;(b)state the accounting policies adopted;(c)be prepared in accordance with generally accepted Indian accounting standards; and(d)be prepared in the form as the Commission may stipulate from time to time;(7)The references to costs or liabilities of, or reasonably attributable to licensed business or other business shall be construed as excluding taxation, and capital liabilities which do not relate principally to such business and interest thereon.(8)The distribution licensee shall ensure that the accounting statements in respect of each financial year prepared under clause (2) and the auditor's report in respect of each financial year are publicised in such manner as the Commission may direct and are made available to any person requesting them at a price not exceeding the reasonable cost of duplicating them.(9)The Commission may, from such time it considers appropriate, require the licensee to comply with the provisions of clause (1) to (8) above treating the distribution and supply activities of the licensee as separate and distinct businesses and shall comply with any guidelines issued by the Commission in this regard. In order to meet the requirement of open access, the accounting statements should be maintained separately for capital expenditure of the distribution activity and supply activity while for the purposes of revenue expenditure, the segregation of common services may be done by suitably allocating the same.7. Provision of Information to the Commission. - (1) The distribution licensee shall furnish to the Commission without undue delay such information, documents and details related to the licensed business or any other business of the licensee engaged for optimum utilisation of the assets of the licensed business, as the Commission may require from time to time for its own purposes or for the purposes of the Government of India, State Government, the Central Commission, and/or the Central Electricity Authority, the Stale Transmission Utility and Stale Load Dispatch Centre.
(2)The distribution licensee shall furnish information on standards of performance in accordance with regulation 24 of Tamil Nadu Electricity Distribution Standards of Performance Regulations 2004.(3)The distribution licensee on occurrence of any major incident shall notify the Commission about such occurrence as directed to under the Tamil Nadu Electricity Distribution Code.(4)The distribution licensee shall also undertake such studies as the Commission may direct it to undertake from time to time for the improvement of its distribution business and any other matter concerning the distribution business that the Commission considers necessary in the public interest.(5)The distribution licensee shall duly inform the Commission about any incident restricting it from meeting its obligations under its licence including any act of omission or commission by others and steps taken by the licensee to mitigate the effect of such incident.(6)The Commission may at any time require the licensee to comply with the provisions of clauses (3) to (5) as to incidents which the Commission may specifically direct and the licensee shall be obliged to comply with the same notwithstanding that such incidents are not major incidents; provided that the time limits specified in clause (3) shall commence from the date The distribution licensee shall submit a business plan, as required under the TNERC (Terms and Conditions for Determination of Tariff) Regulations -2005, within three months of this licence coming into force and shall update such plan annually.(8)The Commission may require the licensee to intimate by the end of first quarter of each financial year the progress made in implementing the business plan of the previous financial year with the comparison of actual implementation vis-a-vis the plan as approved by the Commission.8. Capital Investment Plan. - Tire licensee shall comply with the provisions relating to Capital Investment Plan as detailed in TNERC (Terms and Conditions for determination of tariff) Regulations - 2005.
9. Payment of Licence Fees. - (1) Within thirty days or such further period as the Commission may allow after the date of commencement of the licence, the licensee shall pay to the Commission [a fee as specified in regulation 9 of the Tamil Nadu Electricity Regulatory Commission-Fees and Fines Regulations 2004] , on a prorata basis for the balance period of the year in quarterly instalments as specified in sub-clause (2).
(2)For the subsequent financial year(s), for as long as this Licence remains in force, the Licensee shall, in four equal instalments by the 10th 01 April, 10th of July, 10th of October and 10th of January in each year, or such further period as the Commission may allow, pay to the Commission [an annual fee as specified in regulation 9 of the Tamil Nadu Electricity Regulatory Commission-Fees and Fines Regulations 2004] (3)The Commission may, from time to time revise the annual licence fee payable by the licensee. The Commission may publish such notice, detailing the annual licence fee payable by such licensee on/ or before the start of each financial year.(4)Where the distribution licensee fails to pay to the Commission any of the fees due under sub-clauses (1) or (2) by the due dates:(a)without prejudice to other obligations, the distribution licensee shall be liable to pay interest on the outstanding amount at a simple interest rate of two percent per month, the interest being payable for the period beginning on the day after which the amount became due, and ending on the day on which the payment is made to the Commission in cleared funds; and(b)in the event of continued default by the distribution licensee, the Commission may revoke this licence pursuant to section 19 of the Act and regulation 20 of these regulations.(5)The distribution licensee shall be entitled to take into account any fee paid by it under -this clause as an expense in the determination.of aggregate revenues to be charged to the tariffs, but shall not take into account any interest paid pursuant to this clause.10. Amendment of Licence Conditions. - Any terms and conditions of licence may be altered or amended by the Commission at any time in public interest in exercise of powers under section 18 of the Act. The following provisions shall have effect for any alterations or amendments:
(a)where the licensee has made an application under sub-section (1) of section 18, of the Act proposing any alteration or modifications to the terms and conditions of licence, the licensee shall publish a notice of such application with such particulars and in such manner as specified in Regulation 9 (1) (a) of these regulations;(b)in the case of an application proposing alterations or modifications in the area of activity comprising the whole or any part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the occupation of the Government for defence purposes, the Commission shall make any alterations or modifications only with the consent of the Central Government;the Commission shall not make any alterations or modification unless all suggestions or objections received within thirty days from the date of the first publication of the notice have been considered.11. Settlement of Disputes. - The provisions contained in regulations 21 to 24 of these regulations, shall apply to any dispute between the distribution licensee and any generating company and such disputes shall be settled in accordance with the provisions contained in the said regulations.
12. Suspension of Distribution Licence. - The provisions relating to suspension of the distribution Licence and sale of utility as stipulated in section 24 of the Act is applicable and are reproduced below:
(1)"If at any time the Appropriate Commission is of the opinion that a distribution licensee-(a)has persistently failed to maintain uninterrupted supply of electricity conforming to standards regarding quality of electricity to the consumers; or(b)is unable to discharge the functions or perform the duties imposed on it by or under the provisions of this Act; or(c)has persistently defaulted in complying with any direction given by the Appropriate Commission under this Act; or(d)has broken the terms and conditions of licence, and circumstances exist which render it necessary for it in public interest so to do, the Appropriate Commission may; for reasons to be recorded in writing, suspend, for a period not exceeding one year, the licence of the distribution licensee and appoint an Administrator to discharge the functions of the distribution licensee in accordance with the terms and conditions of the licence;Provided that before suspending a licence under this section, the Appropriate Commission shall give a reasonable opportunity to the distribution licensee to make representations against the proposed suspension of licence and shall consider the representations, if any, of the distribution licensee.(2)Upon suspension of licence under sub-section (1), the utilities of the distribution licensee shall vest in the Administrator for a period not exceeding one year or up to the date on which such utility is sold in accordance with the provisions contained in section 20, whichever is later.(3)The Appropriate Commission shall, within one year of appointment of the Administrator under sub-section (1), either revoke the licence in accordance with the provisions contained in section 19 or revoke suspension of the licence and restore the utility to the distribution licensee whose licence had been suspended, as the case may be.(4)In a case where the Appropriate Commission revokes the licence under sub-section (3), the utility of the distribution licensee shall be sold within a period of one year from the date of revocation of the licence in accordance with the provisions of section 20 and the price after deducting the administrative and other expenses on sale of utilities be remitted to the distribution licensee."13. Compliance With the Grid Code by the Distribution Licensee. - The distribution licensee shall ensure due compliance with the Tamil Nadu Electricity Grid Code specified by the Commission under clause (h) sub section (1) of section 86.
14. Compliance with the Electricity Supply Code and Distribution Code by the Distribution Licensee. - The distribution licensee shall ensure due compliance with the Tamil Nadu Electricity Supply Code and the Tamil Nadu Electricity Distribution Code as in force for the time being.
15. Consumer Service. - (1) The distribution licensee shall duly comply with the regulations specified by the Commission from time to time in regard to consumer services including the terms and conditions relating to consumer services contained in the Tamil Nadu Electricity Supply Code and Tamil Nadu Electricity Distribution Code and Tamil Nadu Electricity Distribution standards of performance regulations.
(2)Payment of Bills : The procedures regarding billing and payment of electricity charges outlined in Tamil Nadu Electricity Supply code shall be followed both by the licensees and the consumers.(3)Complaint Handling Procedure : The distribution licensee shall establish a forum for redressal of grievances of the consumers in accordance with the Regulations for Consumer Grievance Redressal Forum and Electricity Ombudsman, 2004, as specified by the Commission.(4)Consumer Rights Statement: (a) The distribution licensee shall, within a reasonable period of time as specified by the Commission after the commencement of the licence or such other time as the Commission may allow, prepare and submit to the Commission for approval, a consumer rights statement, explaining to consumers their rights as Consumers serviced by such licensee. The Commission may, upon holding such consultation with the TNERC State Advisory Committee, and such other persons or bodies of persons who the Commission considers as representing the interests of consumers likely to be affected by it, make such modification of the statement, as it considers necessary in public interest. ?(b)The Commission may, upon receiving a representation or otherwise, require such licensee to review the consumer rights statement prepared and the manner in which it has been implemented with a view to determining whether any modification should be made to it or to the manner of its implementation.(c)The distribution licensee shall submit any revision to the consumer rights statement that it wishes to make to the Commission for its approval, including any representation received by such licensee and not accepted by it. The Commission may modify the existing consumer rights statement, as it considers necessary.(d)The distribution licensee shall:(i)draw to the attention of consumers, in such manner as the Commission may direct, the existence of its consumer rights statement and each substantive revision of it and how they may inspect or obtain a copy of such consumer rights statement in its latest form make a copy of its consumer rights statement, revised from time to time, available for inspection by members of the public at its offices during normal working hours; and(ii)provide to all new consumers to be served by it, and to any other person who requests, a copy of the consumer rights statement, revised from time to time, at a price not exceeding the reasonable cost of duplicating it.(5)The distribution licensee shall duly comply with the standards as the Commission may specify from time to time, in performing its duties under the Act.16. Distribution System Planning and Security Standards, Distribution System Operating Standards. - The Distribution licensee shall comply with the provisions outlined in Chapter 3 and 5 of the Tamil Nadu Electricity Distribution Code.
17. Duty To Supply. - The Distribution licensee shall comply with the provisions outlined in Regulation 27 of the Tamil Nadu Electricity Distribution Code.
18. Powers to Recover Expenditure, Recover Security. - The Distribution licensee shall comply with the provisions outlined in Chapter 7 of the Tamil Nadu Electricity Distribution Code.
19. Use of Meters. - The distribution licensee shall comply with the requirements of the Act and the regulations, directions and orders of the Commission in regard to supply of electricity" through meter as published in Regulation 7 of the Tamil Nadu Electricity Supply Code.
20. Provision of Subsidies to Certain Consumers. - The distribution licensee shall be guided by the provisions as per TNERC (Terms and Conditions for Determination of Tariff) Regulations, 2005.
21. Powers of the Licensee for Revenue Realisation, Revention of Meter Tampering, Etc. - The distribution licensee shall act as per the provisions in Chapters 2 and 4 of the Tamil Nadu Electricity Supply Code.
22. Power to Enter Premises and to Remove Fittings or Other Apparatus of Licensee. - The distribution licensee shall act as per the provisions of Regulation 25 of the Tamil Nadu Electricity Supply Code.
23. Theft of Electricity, Lines, Materials, Inter-Ference with Works, etc. - The distribution licensee shall act as per the provisions in Regulation 25 (B) of the Tamil Nadu Electricity Supply Code.
24. Disconnections and Other Actions. - The distribution licensee shall act as per the provisions of Regulation 21 of the Tamil Nadu Electricity Supply Code.
25. Introduction of Competition in Supply. - (1) In accordance with section 14 of the Act, the Commission may, grant licence to two or more persons for distribution of electricity through their own distribution system within the same area of supply subject to the condition that the applicant meets the eligibility norms as specified by the Central Government pursuant to under clause (b) of sub section (2) of section 176 of the Act. And no applicant who complies with all the requirements for grant of licence shall be refused licence on the ground that there already exists a licensee m the same area for the same purpose.
(2)As and when permitted by the Commission a consumer or a class of consumers can avail electricity from a person other than the licensee of his area of supply. In such a case the duties of the licensee shall be that of a "common carrier" providing non-discriminatory open access and the charges payable will be, determined by the Commission.(3)The Commission may, fix only the maximum ceiling of tariff for retail sale of electricity in an area of supply having two or more distribution licensees.26. Application of the General Conditions to Deemed Licensees. - The conditions as set out herein above are applicable to any person who is a deemed licensee under section 14 of the Act.
Schedule 1
Licensed Area of Distribution LicenseeThe distribution system detailed below, covering the following circles/districts / geographical area in the state of Tamil Nadu, including cantonment, aerodrome, fortresses, arsenal, dockyard or camp or any building or place in occupation of Central Government for defence purposes and without however affecting the rights of any other Licensee or exemption holder, as the case may be, under the provisions of the Electricity Act. 2003Annexure 8Form No. 7Format and Conditions of Licence of an Electricity TraderLicence Granted for Trading in Electricity[See Regulations 15(4)]The Tamil Nadu Electricity Regulatory Commission (hereinafter referred to as "the Commission"), in exercise of the powers conferred under section 14 of the Electricity Act, 2003 (Act 36 of 2003, hereinafter referred to as "the Act"), hereby grants this licence as a Category....... trader to........,(hereinafter referred to as "the licensee") to trade in electricity as an electricity trader in the area ...... subject to the terms and conditions contained in the Act, (in particular, Section 17 to 22 thereof, both inclusive), the rules made by the Central Government (hereinafter referred to as "the Rules") and the regulations specified by the Commission (hereinafter referred to as "the Regulations"), including statutory amendments, alterations, modifications, re-enactments thereof, which shall be read as part and parcel of this licence.The licence shall come into effect from.......Part-I Definitions1. Words, terms and expressions to which meanings are assigned by the Electricity Act 2003 (36 of 2003) (hereinafter called the 'Act'), shall have the same meaning in these General Conditions.
2. Unless the context otherwise requires:
(a)"accounting statement" means for each financial year, accounting statements for the licensed business comprising a profit and loss account, a balance sheet and a statement of sources and application of funds, together with notes thereto as detailed under the Companies Act, 1956 (1 of 1956) or the respective Acts under which the licensee is governed and such other particulars and details in the manner as the Commission may prescribe from time to time. If the trading licensee engages in any business or activity in addition to the licensed business, the accounting statements shall comply with the regulations of the Commission dealing with the treatment of other business of trading licensees and show specifically the amounts of any revenue, cost, asset, liability, reserve or provision, which has been either:(i)charged from the licensed business to any other business or vice versa together with a description of the basis of that charge; or(ii)determined by apportionment or allocation between the licensed business and any other business of the licensee together with a description of the basis of the appointment or allocation.(b)"Act" means the Electricity Act, 2003 (Act 36 of 2003)(c)"agreement" means agreement entered into by the electricity trader with the seller of electricity, buyer of electricity, other licensees, State Load Despatch Centre, consumer etc. that enables the trading transactions;(d)"annual accounts" means the accounts of the licensee prepared in accordance with the provisions of the Companies Act, 1956 and/or in such other manner as may be directed by the Commission in terms of the provisions of the Act;(e)"area of activity" means the area of activity stated in the trading licence within which the licensee is authorised to trade;(f)"auditors" means the licensee's auditors holding office in accordance with the requirements of sections 224 to 234A or section 619 as appropriate, of the Companies Act 1956 (1 of 1956);(g)"authorised" , in relation to any person, business or activity, means authorised by licence granted under section 14 of the Act or deemed to be granted under the first, second, third and fifth proviso to section 14 of the Act or exemption granted under section 13 of the Act and the regulations of the Commission;(h)"Commission" means the Tamil Nadu Electricity Regulatory Commission;(i)"Conduct of Business Regulations" means the Tamil Nadu Electricity Regulatory Commission - Conduct of Business Regulations, 2004, for the time being in force;(j)"customer" means any buyer purchasing electricity from the trader, viz. distribution licensee, any other trading licensee and any customer that the licensee gets into a sale agreement with.(k)"Force Majeure" means events beyond the reasonable control of the licensee, including, but not limited to earthquakes, cyclones, floods, storms, adverse weather conditions, war, terrorist attacks, civil commotion or other similar occurrences that leads to any act that would involve a breach of relevant laws or regulations concerned with electrical safety;(1)"licence" means a licence granted under section 14 of the Act;(m)"licensee" means a person who has been granted a licence under section 14 of the Act;(n)"licensed business" means the business of trading of electricity in the area of activity as authorised under the licence;(o)"open access" means the non-discriminatory provision for the use of transmission lines or distribution lines or transmission systems or distribution systems or associated facilities with such lines or systems by any licensee or customer or a person engaged in generation in accordance with the regulations specified by the Commission;(p)"person" shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person;(q)"regulations" means the regulations made by the Commission, under the provisions of the Act;(r)"State" means the State of Tamil Nadu;(s)"State Government" means the Government of the State of Tamil Nadu;(t)"subsidiary" shall have the same meaning as in section 4 of the Companies Act 1956 (1 of 1956);(u)"supply" in relation to electricity means the sale of electricity to a licensee or consumer;(v)"Tamil Nadu Electricity Distribution Code" means the Code published by he Commission under sections 46 and 86 of Act;(w)"Tamil Nadu Electricity Supply Code" means the Code published by the Commission under section 50 of the Act;(x)"trader" means a person who has been granted a licence or deemed to be a licensee to undertake trading in electricity under section 14 of the Act;(y)"trading" means purchase of electricity for resale thereof and the expression "trade" shall be construed accordingly;(z)"trading business" means the authorised business of the trading licensee in the area of supply;(aa)"transfer" shall include the sale, exchange, gift, lease, licence, loan, securitisation, mortgage, charge, pledge or grant of other encumbrance or otherwise permitting of any encumbrance to subsist or parting with physical possession or any other disposition or dealing;(ab)"transmit" means conveyance of electricity by means of transmission lines and the expression "transmission" shall be construed accordingly;(ac)"transmission licensee" means a licensee authorised to establish or operate transmission lines;(ad)"transmission system" means the system consisting mainly of extra high voltage electric lines having design voltage of 33 kV and higher, owned or controlled by the transmission licensee, and used for the purposes of the conveyance of electricity and includes all bays/equipments upto the interconnection with the distribution system, and any plant, apparatus and meters owned or used in connection with the transmission of electricity, but shall not include any part of a distribution system;Part-II General Conditions3. Period & Transferability of the Licence. - (1) The trading licence shall come into force on the date specified by the Commission in the order granting such licence and unless revoked earlier, in accordance with the regulation 20 of these regulations or under section 19 of the Act, shall remain in force for 25 (Twenty five) years from that date.
(2)This trading licence is not transferable, except in accordance with the provisions of the Act, the rules and the regulations.4. Compliance with Laws, Rules and Regulations. - (1) The trading licensee shall comply with the provisions of the Act, rules, regulations, orders and directions issued by the Commission from time to time.
(2)The trading licensee shall act in accordance with this General Conditions except where the licensee is exempted from any provisions of these General Conditions at the time of the grant of licence or otherwise specifically permitted by the Commission for any deviation therefrom.(3)The trading licensee shall duly comply with the order and directions of the National Load Despatch Centre, Regional Load Despatch Centre and the State Load Despatch Centre and other statutory authorities issued in the discharge of their functions.5. Duties of the Trading Licensee. - (1) The trading licensee may engage in the business of trading in electricity in the State provided that any such sale or supply of electricity to customer subject to the trade margin that may be fixed by the Commission from time to time.
(2)The trading licensee shall have in place all agreements, including the billing and settlement agreement, for the purchase, sale and supply of electricity, and all necessary authorisations as required by it to be able to perform its obligations under such agreements.(3)The trading licensee shall not without the prior approval of the Commission:(a)undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any other licensee in its area of activity; or(b)acquire any beneficial interest in any generating company or generating station or distribution licensee or any other trading licensee; or(c)merge its utility with any other licensee within the State; or(d)assign its licence, or transfer its utility, or any part thereof, by sale, lease, exchange or otherwise;Any agreement relating to any transaction referred to in sub-clause (a) to sub- clause (d) unless made with the approval of the Commission, shall be void.(4)To obtain the approval of the Commission as aforesaid, the licensee shall file a suitable application with the Commission disclosing relevant facts in that behalf and the Commission shall dispose such application expeditiously.(5)The grant of this trading licence to the licensee shall not in any way hinder or restrict the right of the Commission to grant a licence to any other person within the same area for trading in electricity as an electricity trader. The trading licensee shall not claim any exclusivity.(6)The trading licensee shall carryout trade by entering into appropriate contracts. Necessary safeguards with regard to supply of electricity through trading, or payment for the electricity traded shall be included in the agreements between the parties. All trading arrangements shall be done through the letters of credit or with any other superior instrument.(7)If the contract of the trading licensee with its customer is for a fixed term, then prior to the expiry of such fixed term, the licensee shall inform the customer as to when the term expires and the tariffs and terms and conditions applicable to the customer beyond the expiry of the contract, if the arrangement is continued.(8)The trading licensee shall comply with the requirements of laws in force and, in particular, the provisions of the Act, the rules and the regulations, Tamil Nadu Electricity Grid Code, Tamil Nadu Electricity Distribution Code, Tamil Nadu Electricity Supply Code, other codes, orders and directions issued by the Commission from time to time.(9)The trading licensee shall maintain an up to date register or record of all the business transactions.(10)The trading licensee shall be governed by the technical requirement, capital adequacy requirement and creditworthiness specified by the Commission in these regulations, for being an electricity trader and shall upgrade these technical and capital adequacy requirements including staff, when the volume of trade increases.(11)The trading licensee shall increase its net worth if the quantum of trade moves from a lower category to a higher category and the change of category shall be decided based on the volume of electricity traded cumulated as on 31st March of each year of which the licensee shall keep the Commission informed of his moving from one category to the other and subsequent changes in the net worth.(12)The trading licensee shall establish adequate communication facilities like telephone, fax, computer, internet facilities, before undertaking the trading.(13)The trading licensee shall render all assistance to any person authorised by the Commission for carrying out his duties relating to the licence.(14)The trading licensee shall pay the licence fee as specified in regulation 9 of the Tamil Nadu Electricity Regulatory Commission Pees and Pines Regulations 2004.(15)The trading licensee shall purchase the energy required for meeting its obligation under its licence in an economical manner and under a transparent power purchase or procurement process and in accordance with the regulations, guidelines, directions made by the Commission from time to time.6. Accounts. - (1) Unless otherwise permitted by the Commission the financial year of the trading licensee for the purposes of these General Conditions and matters relating to the licensed business shall run from the first of April to the following thirty-first of March.
(2)Tire trading licensee shall, in respect of the licensed business and any other business:(a)prepare on a consistent basis from such accounting records and deliver to the Commission(i)the accounting statements;(ii)in respect of the first six months of each financial year, a half yearly profit and loss account, cash flow statement and balance sheet together with such supporting documents and information as the Commission may prescribe from time to time such statements and documents to be published in the manner prescribed by the Commission;(iii)in respect of the accounting statements prepared, an auditor's report for each financial year, stating whether in their opinion these statements have been properly prepared in accordance with this clause and give a true and fair view of the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable to such businesses to which the statements relate; and(iv)a copy of each half yearly profit and loss account not later than three months after the end of the period to which it relates, and copies of the accounting statements and auditor's report not later than six months after the end of the financial year to which they relate.(3)The trading licensee hall not normally change the basis of charge or apportionment or allocation of revenues or expenses in relation to the preparation of the accounting statements in respect of a financial year from those applied in respect of the previous financial year, without prior intimation to the Commission. Any change, if proposed, in the basis of charge or apportionment of revenues or expenses shall be consistent with the provisions of the Companies Act, 1956, the accounting standards or rules and any guidelines issued by the Commission in this regard.(4)Where, in relation to the accounting statements in respect of a financial year, the licensee has changed the basis of charge or apportionment or allocation from those adopted for the immediately preceding financial year, the licensee shall, if requested by the Commission, (in addition to preparing accounting statements on those bases which it has adopted), prepare such accounting statements on the basis which it applied in respect of the immediately preceding financial year.(5)Accounting statements under sub-clause (2) above shall, unless or otherwise approved or directed by the Commission:(a)be prepared and published with the annual accounts of the trading licensee, in the manner provided herein;(b)state the accounting policies adopted;(c)be prepared in accordance with generally accepted Indian accounting standards; and(d)be prepared in the form as the Commission may stipulate from time to time;(6)The references to costs or liabilities of, or reasonably attributable to licensed business or other business shall be construed as excluding taxation, and capital liabilities which do not relate principally to such business and interest thereon.(7)The trading licensee shall ensure that the accounting statements in respect of each financial year prepared under sub-clause (2) and the auditor's report in respect of each financial year are published in such manner as the Commission may direct and are made available to any Person requesting them at a price not exceeding the reasonable cost of duplicating them.(8)The Commission may, from such time it considers appropriate, require the licensee to comply with the provisions of clause (1) to (7) above treating the trading and other activities of the licensee as separate and distinct businesses and shall comply with any guidelines issued by the Commission in this regard.(9)Any person authorised by the Commission shall be entitled to inspect and verify the accounts of the trading licensee and the licensee shall render all necessary assistance to such person.7. Provision of Information to the Commission. - (1) The trading licensee shall furnish to the Commission without undue delay such information, documents and details related to the licensed business or any other business of the licensee, as the Commission may require for its own purposes or for the purposes of the Government of India, State Government, the State Transmission Utility, The State Load Dispatch Centre, the Central Commission and/or the Central Electricity Authority.
(2)The trading licensee shall furnish the information as maybe required from time to time to monitor the licensee's performance and compliance of the terms and conditions of the licence and any other legislative or regulatory requirement in the manner required by the Commission.(3)The trading licensee shall file the annual revenue requirements, at a time as may be directed by the Commission, and in the form and manner specified thereof, to enable the Commission to determine the trading margin, wherever necessary.(4)The trading licensee shall duly inform the Commission about any incident restricting it from meeting its obligation under the licence granted including any act of omission or commission by others and steps taken by the licensee to mitigate the effect of such incident. The trading licensee shall notify the Commission as soon as possible the occurrence of any other incident which materially affect any part of its trading activities and in any event, by not later than thirty days from the date of such occurrence:(a)submit a report to the Commission giving full details of the facts within the knowledge of the licensee regarding the incident and its cause; and(b)give copies of the report to all parties concerned with such incident and to such other persons as the Commission may direct.(5)The Commission may by order, after providing an opportunity of hearing, direct the trading licensee to provide such amount of compensation as the Commission may direct, to persons who are affected or prejudiced by any act of commission, omission or negligence on the part of any of the employees or agents of the licensee.(6)The Commission may at any time require the trading licensee to comply with the provisions of this clause 6 in a manner the Commission may direct and the licensee shall be obliged to comply with the same.(7)The trading licensee shall submit a business plan in accordance with the provisions of TNERC (Terms and Conditions for determination of tariff) Regulations - 2005.8. Capital Adequacy, Credit Worthiness Norms to Be Maintained. - (1) The trading licensee shall duly comply with the regulations, guidelines, directions and orders the Commission may issue from time to time in regard to the technical and financial parameters and norms to be maintained at all times by the trading licensee.
(2)The net worth at any point of time during the operation of trading shall not reduce below 75% of the minimum requirements specified for the respective category of trader and shall be replenished at the end of every quarter ending March, June, September & December every year to the above specified levels. An audited certificate of compliance would need to be submitted to the Commission for every quarter within a period of 30 days* from the end of that quarter.(3)The trader shall make reasonable endeavours to maintain investment grade credit rating obtained from a leading independent Credit Rating Agency for all debts throughout the period they remain on the books of the trader.(4)The non-maintenance of the technical and financial parameters as per sub-clause (1) above shall amount to a material breach of the obligations by the licensee;(5)The trading licensee shall maintain the technical resources as specified in the regulations and provide to the Commission details of any changes justifying the adequacy of its capability to cater to the volume of trade it handles;(6)If the trading volume of the licensee exceeds its specified maximum volume of trade, then the licensee shall immediately inform the Commission and increase its networth as specified in the regulations. In case of non-reporting of such an event the Commission shall levy compensation to the licensee for such negligence, and the licence shall be liable for revocation.(7)The increased networth shall remain in force till such time the increased networth consistently exceeds the requirement for a particular volume of trade through three consecutive months. On any such consistent reduction in volume of trade, the networth requirement may be revised in proportion to the average traded volumes during the three months, specified herein.9. Payment of Licence Fees. - (1) Within thirty days or such further period as the Commission may allow after the coming into force of this licence, the licensee shall pay to the Commission [a licence fee as specified in regulation 9 of the Tamil Nadu Electricity Regulatory Commission-Fees and Fines Regulations 2004] [[Substituted Commission's Notification No.TNERC/REGULAT10NS/F&F/4/?-l dated 16.11.2006 (w.e.f. 3.1.2007) which before substitution stood as under:
'(14) The trading licensee shall pay the licence fee.specified under these regulations in accordance with the time-schedule specified hereunder.']], on a prorata basis for the balance period of the year in quarterly instalments as specified in sub-clause (2).(2)For the subsequent financial year(s), for as long as this licence remains in force, the licensee shall, in four equal instalments by the 10th of April, 10th of July, 10th of October and 10th of January in each year, or such further period as the Commission may allow, pay to the Commission [an annual licence fee as specified in regulation 9 of the Tamil Nadu Electricity Regulatory Commission-Fees and Fines Regulations 2004] (3)The Commission may, from time to time revise the annual licence fee payable by the licensee. The Commission may publish such notice, detailing the annual licence fee payable by the licensee on/ or before the start of each financial year.(4)Where the trading licensee fails to pay to the Commission any of the fees due under sub-clauses (1) or (2) by the due dates:(a)without prejudice to other obligations, the licensee shall be liable to pay interest on the outstanding amount at a simple interest rate of two percent per month, the interest being payable for the period beginning on the day after which the amount became due, and ending on the day on which the payment is made to the Commission in cleared funds; and(b)in the event of continued default by the licensee, the Commission may revoke this licence pursuant to section 19 of the Act and regulation 20 of these regulations.(5)The trading licensee shall be entitled to take into account any fee paid by it under this clause as an expense in the determination of aggregate revenues, but shall not take into account any interest paid pursuant to this clause.(6)In case the trading licensee has moved from a lower Category to a higher Category, the balance of licence fee applicable to the licensee for such changed category shall be paid before 30th April of each year.10. Amendment of Licence Conditions. - Any terms and conditions of licence may be altered or amended by the Commission at any time in public interest in exercise of powers under section 18 of the Act. The following provisions shall have effect for any alterations or amendments:
(a)where the licensee has made an application under sub-section (1) of section 18, of the Act proposing any alteration or modifications to the terms and conditions of licence, the licensee shall publish a notice of such application with such particulars and in such manner as specified in Regulation 9 (1) (a) of these regulations"(b)in the case of an application proposing alterations or modifications in the area of activity comprising the whole or any part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the occupation of the Government for defence purposes, the Commission shall make any alterations or modifications only with the consent of the Central Government;the Commission shall not make any alterations or modification unless all suggestions or objections received within thirty days from the date of the first publication of the notice have been considered.11. Settlement of Disputes. - The provisions contained in regulation 24 to 27 of these regulations, shall apply to any dispute between the trading licensee and any generating company or transmission licensee or consumers or distribution licensee and such disputes shall be settled in accordance with the provisions contained in the said regulations.
12. Tariff, Trading Margins and Expected Revenue Calculation. - (1) The trading licensee shall calculate the expected revenue from charges, which it is permitted to recover in accordance with the provisions of the Act, the regulations of the Commission, the tariff terms and conditions and other guidelines, orders and directions issued by the Commission from time to time.
(2)The trading licensee shall file the expected revenue calculation in the manner provided in the Conduct of Business Regulations and consistent with the regulations issued under section 61 of the Act.(3)Unless otherwise provided in the Special Conditions or in any order or direction made by the Commission the licensee shall every year, not later than 31st November, submit to the Commission a Statement with full details of its expected aggregate revenues and cost of service for the ensuing financial year for its licensed business in accordance with the provisions of the Act and the regulations, guidelines and orders issued by the Commission from time to time.13. Compliance and Submission of Information to State Load Despatch Centre & Central Electricity Authority. - (1) The trading licensee shall comply with the provisions of codes and regulations published / specified by the Commission and directives of the Commission issued from time to time;
(2)The trading licensee shall submit to the State Load Dispatch Centre (SLDC) all such information pertaining to the trade of electricity by &e licensee, provided further that the SLDC shall verify the information provided by the licensee on quantum of electricity traded as against its reports and submit a review report to the Commission.(3)The trading licensee shall submit information to the Central Electricity Authority as required under section 74 of the Act in accordance with clause (i) of section 73 of the Act;(4)The trading licensee shall pay the SLDC charges as may be specified by the Commission from time to time;(5)The distribution licensee(s) when trading with other distribution licensee(s) shall comply with the Commission's specified ceiling value of trading margin.(6)The trading licensee shall comply with the requirements under section 66 of the Act as may be specified by the Commission to promote the development of market;14. Prudential Reporting. - The trading licensee, shall, as soon as practicable report to the Commission:
(a)Any significant changes in its circumstances which may affect the licensee's ability to meet its obligations under the Act, rules and regulations directions/orders issued by the Commission, the Tamil Nadu Electricity Grid Code, agreement or the licence.(b)Any material breach of the provisions of the Act, the rules and the Regulations, directives/orders issued by the Commission, the Tamil Nadu Electricity Grid Code, the Tamil Nadu Electricity Distribution Code, the Tamil Nadu Electricity Supply Code, agreement or the licence.(c)Any major change in shareholding pattern, ownership or management of the licensee.15. Communication. - (1) All communications relating to the trading licence shall be in writing and shall be delivered either in person to the addressee or his authorised agent, or sent by registered/speed post to the place of business of the addressee.
(2)All communications shall be regarded to have been given by the sender and received by the addressee:(a)when delivered in person to the addressee or to his authorised agent;(b)on expiry of fifteen days from the date of sending by registered / speed post at the address of the addressee.16. Introduction of Competition in Trading. - (1) The Commission may grant licence to more than one person to trade in the same area of activity of the licensee subject to the proviso to section 14 of the Act.
(2)The Commission may, after considering applicable Government policy and in consultation with the licensees and generating companies, formulate arrangements for the introduction of competition in supply/ promote the development of a market (including trading of power) in the State. These consultations will adhere to the principles of natural justice, financial viability of the sector and will afford a reasonable opportunity to the affected parties to represent their perspectives in the matter.(3)The Commission may, with reasons recorded in writing, and after providing reasonable opportunity to the licensee to be heard, issue such appropriate orders modifying or amending the conditions of this licence, as it shall consider appropriate for the purpose of implementing the arrangements referred to in this clause.(4)The trading licensee shall arrange systems and other resources necessary for complying with this clause.(5)The trading licensee in any circumstances shall not enter into any Agreement or abuse its dominant position or enter into a combination, which is likely to cause or causes an adverse effect on competition in the electricity industry.(6)If the trading licensee anticipates that it will be unable to meet any of the obligations under this clause, it shall as soon as possible notify the Commission and give sufficient reasons for the same.17. Application of the General Conditions to Deemed Licensee. - The conditions as set out herein above are applicable to any person who is a deemed licensee under section 14 of the Act.
Schedule 1
Area of ActivityThe following circles/districts in the state of Tamil Nadu:........... including cantonment, aerodrome, fortresses, arsenal, dockyard or camp or any building or place in occupation of Central Government for defence purposes and without however affecting the rights of any other Licensee or exemption holder, as the case may be, under the provisions of the Electricity Act,2003(By order of the Commission)ChennaiDatedSd/-Secretary/TNERCAnnexure 9Extracts from the Arbitration & Conciliation Act, 199661. Application and Scope. - (1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.
(2)This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation. 62. Commencement of conciliation proceedings(1)The party initiating conciliation shall send to the other party, a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.(2)Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.(3)If the other party rejects the invitation, there will be no conciliation proceedings.(4)If the party initiating conciliating does not receive a reply within thirty days from the date on which he sends the invitation or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.63. Number of conciliators. - (1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
(2)Where there is more than one conciliator, they ought, as a general rule, to act jointly.64. Appointment of conciliators. - (1) Subject to sub-section (2):
(a)in conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator;(b)in conciliation proceedings with two conciliators, each party may appoint one conciliator;(c)in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.(2)Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,-(a)a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or(b)the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person:Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.65. Submission of Statements to conciliators. - (1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.
(2)The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.(3)At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.Explanation. - In this section and all the following sections of this Part, the term "conciliator" applies to a sole conciliator, two or three conciliators as the case may be.66. Conciliator not bound by certain enactments. - The conciliator is not bound by the Code of Civil Procedures, 1908 or the Indian Evidence Act, 1872.
67. Role of conciliator. - (1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
(2)The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.(3)The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the cases, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.(4)The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.68. Administrative assistance. - In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
69. Communication between conciliator and parties. - (1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.
(2)Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.70. Disclosure of information. - When the conciliator receive factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.71. Co-operation of parties with conciliator. - The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials,provide evidence and attend meetings.
72. Suggestions by parties for settlement of dispute. - Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.
73. Settlement agreement. - (1) When it appears to the conciliator that there exist elements of a settlement, which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.
(2)If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.(3)When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.(4)The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.74. Status and effect of settlement agreement. - The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
75. Confidentiality. - Not withstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.
76. Termination of conciliation proceedings. - The conciliation proceedings shall be terminated -
(a)by the signing of the settlement agreement by the parties on the date of the agreement; or(b)by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or(c)by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or(d)by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.77. Resort to arbitral of judicial proceedings. - The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
78. Costs. - (1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.
(2)For the purpose of sub-section (1), "costs" means reasonable costs relating to-(a)the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;(b)any expert advice requested by the conciliator with the consent of the parties;(c)any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68;(d)any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.(3)The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.79. Deposits. - (1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78, which he expects will be incurred.
(2)During the course of the conciliation proceeding, the conciliator may direct supplementary deposits in an equal amount from each party.(3)If the required deposits under sub-section (1) and (2) are not paid in full by both the parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties effective on the date of that declaration.(4)Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the parties.80. Role of conciliator in other proceedings. - Unless otherwise agreed by the parties,-
(a)the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceedings in respect of dispute that is the subject of the conciliation proceedings;(b)the conciliator shall not be represented by the parties as a witness in any arbitral or judicial proceedings.81. Admissibility of evidence in other proceedings. - The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether not such proceedings relate to the dispute that is the subject of the conciliation proceedings,-
(a)views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;(b)admissions made by the other party in the course of the conciliation proceedings;(c)proposals made by the conciliator;(d)the fact that the party had indicated his willingness to accept a proposal for settlement made by the conciliator.82. Power of High Court to make rules. - The High Court may make rules consistent with this Act as to all proceedings before the Court under this Act.
83. Removal of difficulties. - (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not consistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty;
(2)Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.(3)Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.84. Power to make rules. - (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Ordinance.
(2)Every rule made by the Central Government under this Act shall be laid, as soon as may be, after it is made before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.85. Repeal and saving. - (1) The Arbitration (Protocol and Convention) Act, 1937, the Arbitration Act, 1940, and the Foreign Awards (Recognition and Enforcement) Act, 1%1 are hereby repealed.
(2)Notwithstanding such repeal,-(a)the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties by this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force;(b)all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act be deemed respectively to have been made or issue under this Act.86. Repeal of Ordinance 27 of 1996 and saving. - (1)The Arbitration and Conciliation (Third) Ordinance 1996 is hereby repealed.
(2)Notwithstanding such repeal any order rule notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance shall be deemed to have been made done or taken under the corresponding provisions of this Act.[[Substituted by Commission's Notification No. TNERC/LR/12/2 dated 4.7.2007 (w.e.f. 25.7.2007) before substitution stood as under:'The applicant shall, within seven days from the date of the application, publish in two English national daily newspapers, including one economic newspaper and two Tamil daily newspapers having a wide circulation in the area for which the licence is sought, a notice of his application as given in Annexure 1.Provided that the applicant may request the Commission to permit it to refrain from publishing any confidential information in order to protect its business interests or rights in intellectual property and the Commission may grant such request after due consideration.']]
