Duties of distribution licensee and open access
Section 42 of the Electricity Act, 2003 deals with duties of distribution licensee and open access. It shall be the duty of a distribution licensee to develop and maintain an efficient, co-ordinated and economical distribution system in his area of supply and to supply electricity in accordance with the provisions contained in this Act. The Act came into force on 10 Jun 2003.
(1) It shall be the duty of a distribution licensee to develop and maintain an efficient, co-ordinated and economical distribution system in his area of supply and to supply electricity in accordance with the provisions contained in this Act.
(2) The State Commission shall introduce open access in such phases and subject to such conditions, (including the cross subsidies, and other operational constraints) as may be specified within one year of the appointed date by it and in specifying the extent of open access in successive phases and in determining the charges for wheeling, it shall have due regard to all relevant factors including such cross subsidies, and other operational constraints:
Provided that 1 [such open access shall be allowed on payment of a surcharge in addition to the charges] for wheeling as may be determined by the State Commission:
Provided further that such surcharge shall be utilised to meet the requirements of current level of cross subsidy within the area of supply of the distribution licensee:
Provided also that such surcharge and cross subsidies shall be progressively reduced 2 *** in the manner as may be specified by the State Commission:
Provided also that such surcharge shall not be leviable in case open access is provided to a person who has established a captive generating plant for carrying the electricity to the destination of his own use:
3 [Provided also that the State Commission shall, not later than five years from the date of commencement of the Electricity (Amendment) Act, 2003, by regulations, provide such open access to all consumers who require a supply of electricity where the maximum power to be made available at any time exceeds one megawatt.]
(3) Where any person, whose premises are situated within the area of supply of a distribution licensee, (not being a local authority engaged in the business of distribution of electricity before the appointed date) requires a supply of electricity from a generating company or any licensee other than such distribution licensee, such person may, by notice, require the distribution licensee for wheeling such electricity in accordance with regulations made by the State Commission and the duties of the distribution licensee with respect to such supply shall be of a common carrier providing non-discriminatory open access.
(4) Where the State Commission permits a consumer or class of consumers to receive supply of electricity from a person other than the distribution licensee of his area of supply, such consumer shall be liable to pay an additional surcharge on the charges of wheeling, as may be specified by the State Commission, to meet the fixed cost of such distribution licensee arising out of his obligation to supply.
(5) Every distribution licensee shall, within six months from the appointed date or date of grant of licence, whichever is earlier, establish a forum for redressal of grievances of the consumers in accordance with the guidelines as may be specified by the State Commission.
(6) Any consumer, who is aggrieved by non-redressal of his grievances under sub-section (5), may make a representation for the redressal of his grievance to an authority to be known as Ombudsman to be appointed or designated by the State Commission.
(7) The Ombudsman shall settle the grievance of the consumer within such time and in such manner as may be specified by the State Commission.
(8) The provisions of sub-sections (5), (6) and (7) shall be without prejudice to right which the consumer may have apart from the rights conferred upon him by those sub-sections.
Section 42, The Electricity Act, 2003 (Act 36 of 2003).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 8
- s. 9 Captive generation
- s. 10 Duties of generating companies
- s. 38 Central Transmission Utility and functions
- s. 39 State Transmission Utility and functions
- s. 40 Duties of transmission licensees
- s. 49 Agreements with respect to supply or purchase of electricity
- s. 86 Functions of State Commission
- s. 181 Powers of State Commissions to make regulations
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Sesa Sterlite Ltd. v. Orissa Electricity Regulatory Commission
Court's Decision & Legal Precedent
Judgment of Main Case order-12.pdf 2014-04-25. CA 5479/2013. A.K. Sikri REPORTABLE. DATE-CHECK false positive (2013-05-03 APTEL / 2011 PPA / 2009 SEZ); body is the named reportable. Q of law: an SEZ developer is a deemed distribution licensee under the second proviso to Electricity 14(b) and remains liable to pay cross-subsidy surcharge under s.42 even when consuming power for its own use. Statutory appeal vehicle is s.125 — do not pad 125 or 86.
On this section: Electricity 42: a deemed licensee using power for its own consumption still pays cross-subsidy surcharge; open-access/CSS duties are not waived by captive/own use (Sesa Sterlite). Do not pad 125.
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J. K. Tyre & Industries LTD vs Rajasthan Electricity Regulatory Commn
Court's Decision & Legal Precedent
The Rajasthan Electricity Regulatory Commission has statutory power under Section 86(1)(e) read with Section 181 of the Electricity Act 2003 to impose renewable energy purchase obligations on captive power plants and open access consumers located in the area of distribution licensee, as the term 'total consumption in the area of distribution licensee' includes consumption from all sources within that geographical area. Such obligations, being designed to achieve constitutional mandates under Articles 21, 48A, and 51A(g) of the Constitution and to promote renewable energy as a matter of public policy, do not violate the de-licensing principle of the Act nor do they infringe fundamental rights under Articles 14 or 19(1)(g) of the Constitution. The surcharge imposed for non-compliance is a valid regulatory measure under Section 86(1)(g) and Sections 142, 147 of the Act, representing a compensatory mechanism based on the polluter-pays principle, not an unauthorized tax under Article 265.
On this section: Provides open access framework; court held that open access consumers using distribution lines are still in area of distribution licensee and subject to renewable energy obligations
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National Engineering Industries Ltd. vs State of Rajasthan
Court's Decision & Legal Precedent
Commercial circulars issued by a Discom to clarify the implementation details of a tariff schedule note approved by the regulatory commission are legally enforceable. An industrial consumer who voluntarily accepts power supply at a lower than prescribed voltage under exceptional conditions is bound to bear the resulting transformation losses and pro-rata transformer expenditures to prevent unjust enrichment.
On this section: Analyzing the scope of a distribution licensee's power to recover expenditures and charge tariffs as approved by the State Commission.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… The appeals arise from challenges to the validity of the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016[1]( page-1-0) framed by the Rajasthan Electricity Regulatory Commission[2]( page-1-1) in the exercise of its powers under Section 42 read with Section 181 of the Electricity Act, 2003[3]( page-1-2). The primary grievance of the writ petitioners, appellants herein, before the High Court, and now the appellants before this Court, relates to the restrictions and conditions imposed by the Regulations of 2016 on the exercise of open access for captive …
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… The appeals arise from challenges to the validity of the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016[1]( page-1-0) framed by the Rajasthan Electricity Regulatory Commission[2]( page-1-1) in the exercise of its powers under Section 42 read with Section 181 of the Electricity Act, 2003[3]( page-1-2). The primary grievance of the writ petitioners, appellants herein, before the High Court, and now the appellants before this Court, relates to the restrictions and conditions imposed by the Regulations of 2016 on the exercise of open access for captive …
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… The appeals arise from challenges to the validity of the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2016[1]( page-1-0) framed by the Rajasthan Electricity Regulatory Commission[2]( page-1-1) in the exercise of its powers under Section 42 read with Section 181 of the Electricity Act, 2003[3]( page-1-2). The primary grievance of the writ petitioners, appellants herein, before the High Court, and now the appellants before this Court, relates to the restrictions and conditions imposed by the Regulations of 2016 on the exercise of open access for captive …
Made under this section, and citing it
11 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- CSERC (Redressal of Grievances of the Consumers) Regulations, 2023.Regulation 2023
- UP Electricity Regulatory Commission (Consumer Grievance Redressal Forum) Regulations, 2022Regulation 2022
- Delhi Electricity Regulatory Commission (Forum for Redressal of Grievances of the Consumers and Ombudsman) Regulations, 2018Regulation 2018
- JERC Notification dated 21.11.2016Notification 2016
- the Joint Electricity Regulatory Commission (Distribution Code) (First Amendment), Regulations, 2016.Regulation 2016
- The Himachal Pradesh Electricity Regulatory Commission (Consumer Grievances Redressal Forum and Ombudsman) Regulations, 2013Regulation 2013
- The Himachal Pradesh Electricity Regulatory Commission (Demand Side Management) Regulations, 2011Regulation 2011
- The Himachal Pradesh Electricity Regulatory Commission (Grant of Connectivity, Long-term and Medium-term Intra-State Open Access and Related Matters) Regulations, 2010Regulation 2010
- The Himachal Pradesh Electricity Regulatory Commission (Short Term Open Access) Regulations, 2010Regulation 2010
- The Himachal Pradesh Electricity Distribution Code, 2009Regulation 2009
- UPERC Ombudsman (Terms & Conditions of Service) Regulations, 2007Regulation 2007
Another 16 instruments name this provision in its title or its text without being made under it.
- Electricity (Rights of Consumers) Rules, 2020Rule 2020
- The Electricity (Amendment) Rules, 2020Rule 2020
- The Chhattisgarh State Electricity Supply Code (Second Amendment) 2018Order 2018
- Delhi Electricity Regulatory Commission (Supply Code and Performance Standards) Regulations, 2017Regulation 2017
- The Himachal Pradesh Electricity Regulatory Commission (Authorized Consumer Representative) Regulations, 2016Regulation 2016
- Standard of Performance Regulations, 2015Regulation 2015
- The Joint Electricity Regulatroy Commission for the state of Goa and UT(Standard of Performance for Distribution licensees)Regulation,2015Regulation 2015
- JERC Notification dated 25.03.2013Notification 2013
- The Himachal Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Wheeling Tariff and Retail Supply Tariff) Regulations, 2011Regulation 2011
- JERC Notification dated 11.02.2010Notification 2010
- Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Open Access in Transmission and Distribution) Regulations, 2009Regulation 2010
- JERC Notification dated 31.07.2009Notification 2009
- CSERC (Terms and Conditions for Determination of Tariff) Regulations, 2006.Regulation 2006
- The Electricity Rules, 2005Rule 2005
- UPERC (General Conditions of Transmission Licence) RegulationsRegulation 2005
- The Himachal Pradesh Electricity Regulatory Commission (General Conditions of Trading Licence) Regulations, 2004Regulation 2004
Questions about Section 42
What have the courts held on Section 42 of the Electricity Act?
Sesa Sterlite Ltd. v. Orissa Electricity Regulatory Commission (25 Apr 2014) is the leading judgment on this section among those set out below: Electricity 42: a deemed licensee using power for its own consumption still pays cross-subsidy surcharge; open-access/CSS duties are not waived by captive/own use (Sesa Sterlite). Do not pad 125. Another 2 judgments on this section are set out below, 2 of them from the Supreme Court. They run from 2014 to 2023.
How do I find court cases under Section 42 of the Electricity Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Electricity Act 2003 42, section 42 Electricity Act 2003, section 42 of the Electricity Act. People searching for it also type electricity act 2003 section 42. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Sesa Sterlite Ltd. v. Orissa Electricity Regulatory Commission (25 Apr 2014).
What should I read with Section 42 of the Electricity Act, and has it changed?
8 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 11: most recently CSERC (Redressal of Grievances of the Consumers) Regulations, 2023. (2023), then UP Electricity Regulatory Commission (Consumer Grievance Redressal Forum) Regulations, 2022 (2022), and 9 more.
When did Section 42 of the Electricity Act come into force?
Section 42 of the Electricity Act, cited as Electricity Act 2003 42, came into force on 10 Jun 2003, having been enacted on 26 May 2003. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.