Company : Sol Infotech Pvt. Ltd. Website : www.courtkutchehry.com KARNATAKA PROVISIONAL TRANSMISSION AND BULK SUPPLY LICENCE, 1999 CONTENTS PART 1 :- Preliminary 1. Short title and commencement 2. Definitions 3. Term of licence PART 2 :- General Conditions 4. Grant of licence 5. Prohibited activities 6. Information to the State Government or Commission 7. Disposal of assets 8. Health and safety 9. Application of Indian Electricity Act, 1910 (9 of 1910) and the Electricity (Supply) Act, 1948 (54 of 1948) 10. Application of the Indian Telegraph Act, 1885 (13 of 1885) PART 3 :- Technical Conditions 11. Grid Code 12. Capacity procurement procedure PART 4 :- Tariffs 13. Basis of charges KARNATAKA PROVISIONAL TRANSMISSION AND BULK SUPPLY LICENCE, 1999 In exercise of the powers conferred by sub-section (4) of Section 18 of the Karnataka Electricity Reforms Act, 1999 (Karnataka Act 25 of 1999), the Government of Karnataka, hereby grants to the Karnataka Power Transmission Corporation (KPTC), with effect from 30th August, 1999 provisional licences to engage in the business of transmission and supply of Electricity in the State of Karnataka, on the terms and conditions set out in the licences appended to this notification. The Provisional Licence granted by the Government of Karnataka under sub-section (4) of Section 18 of the Karnataka Electricity Reforms Act, 1999 (Karnataka Act 25 of 1999) to the Karnataka Power Transmission Corporation (KPTC) for carrying on the business of Transmission and Bulk Supply of electricity within the State of Karnataka and through the transmission lines owned by the KPTC and connected to the Karnataka Transmission System shall be upon the terms and conditions specified below: PART 1 Preliminary 1. Short title and commencement :- This Licence may be called as the Karnataka Provisional Transmission and Bulk Supply Licence, 1999. 2. Definitions :- (1) In this licence unless the context otherwise requires. (a) "Act" means the Karnataka Electricity Reforms Act, 1999; (b) "Affiliate" means in relation to the licensee, any subsidiary of the licensee, any company or entity which has any commercial or financial interest in the licensee or in which the licensee has any commercial or financial interest; (c) "Area of transmission and bulk supply" means the area referred to in the Schedule of this licence; (d) "Bulk supplier" means any person who is authorised to provide bulk supply; (e) "Bulk. supply" means the provision of Electricity to an authorised person for resale; (f) "Distribution" means the transportation of Electricity by means of a distribution system; (g) "Distribution and retail supply business" means any authorised business of the licensee (i) in or ancillary to distribution (whether for its own account or that of third parties) through any system owned and/or operated by the licensee and (ii) in the retail supply of electricity to consumers; (h) "Distribution system" means any system (including the licensee's distribution system) consisting (wholly or mainly) of cables, service lines and overhead lines, electrical plant and metering equipment (excluding generator interconnection facilities) having an operating voltage other than EHV owned or operated by an electricity operator authorised to supply Electricity and used for t h e transportation of Electricity to consumers. The distribution system shall not include any part of a EHV system, except the terminal equipment used for the supply of Electricity to a EHV consumer; (i) "Generating plant" means any plant or apparatus for the production of Electricity and shall where appropriate include a generating station comprising one or more generating sets; (j) "Generator" means a person owning a generating plant connected to the licensee's transmission or distribution system; (k) "Generator interconnection facilities" means any elector lines, busbars, switchgear, transformers plant or apparatus owned by generator and utilised for access to the transmission or distribution system; (l) "Grid Code" means the Grid Code prepared under condition 11 of this Licence; (m) "Licensee" means the Kamataka Power Transmission Corporation (KPTC), incorporated under Section 13 of the Act which is the holder of this licence; (n) "Licensee's distribution system" means any distribution system owned and/or operated by a Distribution and Retail Supply Licensee; (o) "Licensee's transmission system" means the transmission system of the transmission and bulk supply power licensee; (p) "Regulations" means the regulations made by the erstwhile Karnataka Electricity Board until the constitution of the Commission, and/or thereafter by the Commission under the Act; (q) "Retail supply" means sale of electricity for use of the consumers'; (r) "Separate business" means each of the Transmission and bulk supply business taken separately from one another and from any other business of the licensee or any affiliate of the Licensee; (s) "Supplier" means any electricity operator who carries out or provides bulk supply or retail supply; (t) "Supply" means the bulk supply of the retail supply of electricity; (u) "Transmission and bulk supply-business" means the authorised business of a licensee in transmission and bulk supply; (v) "Transmission system" means the system consisting of Extra High Voltage Electric lines being operated at EHV (excluding generator interconnection facilities) owned and/or operated by the licensee for the purpose of the transmission of Electricity from one power station to a sub-station or to another power station or between sub-stations or to or from any external interconnection equipment upto the interconnection with the distribution system, any plant and apparatus and meters owned or used by the licensee in connection with the transmission and bulk supply of electricity, but shall not include any part of the licensee's distribution system. (2) The words, terms and expressions used in this licence shall have the same meaning assigned to them in the Karnataka Electricity Reforms Act, 1999 (Karnataka Act 25 of 1999) and rules and regulations made thereunder. (3) Words, terms and expressions used in this licence which are not defined in this Licence or in the Karnataka Electricity Reforms Act, 1999 (Karnataka Act 25 of 1999) shall have the same meaning given to them in the Indian Electricity Act, 1910 (9 of 1910) and the Electricity (Supply) Act, 1948 (54 of 1948) as the case may be. (4) Any references to any enactment or any section of, or Schedule to, or other provision of any such enactment shall be construed, at any particular time, as including a reference to any modification or re-enactment thereof then in force as the same may have been so modified or re-enacted from time to time. 3. Term of licence :- This Licence shall come into force on the 30th day of August, 1999 and shall cease to be valid and effective after twelve months from the said date of commencement on the date on which the decision of the Commission was communicated under Section 18(4)(b) of the Act whichever is earlier. PART 2 General Conditions 4. Grant of licence :- (1) The Licensee shall upon the establishment of the Commission, place this licence before the Commission for a Transmission and Bulk Supply Licence which shall be deemed to constitute an application for grant of licence. (2) The State Government or the Commission as the case may be, may add, alter or substitute any of the conditions contained in this licence with prior consultation with the licensee during the term of this licence. 5. Prohibited activities :- (1) The Licensee shall not on its own account. (a) purchase or otherwise procure electricity or sell or otherwise dispose of electricity to any person other than pursuant to its transmission and Bulk Supply Business except that the licensee shall be permitted to enter into arrangements for the purchase of ancillary services; or (b) own, hold any beneficial interest in, or operate, any generating set or other sources of production of power in the area of transmission and bulk supply; except for meeting its emergency power requirements; or (c) own, hold any beneficial interest in, or operate, any facilities for the transmission of electricity in the area of transmission and bulk supply other than pursuant to a licence granted by the State Government; or (d) commence any non-core activity; (2) For the purposes of this paragraph the terms "ancillary services" and "non-core activity" shall have the following meaning; "ancillary services" means black start reactive power, frequency control and such other services as any electricity operator may be required to have available as ancillary services pursuant to the Grid Code or any agreement with the licensee primarily for the purpose of securing stability of operation of the licensee's transmission system; "non-core activity" means any activity of the Licensee or an affiliate of the licensee other than those authorised or licensed under the Act. 6. Information to the State Government or Commission :- (1) Subject to paragraph 6(2) the licensee shall supply to the State Government or Commission in the manner and at the times specified by the State Government or Commission, such information as the State Government or Commission may consider necessary in respect of the conditions or as it may require for the purpose of performing its functions and duties under the provisions of the Act. (2) The power of the State Government or Commission to require information under paragraph 6(1) is in addition to the power of the State Government or Commission to require information under or pursuant to any other condition of this licence or provisions of the Act. (3) "Information" under this condition shall include any documents, accounts, estimates, returns or reports whether or not prepared specifically at the request of the State Government or Commission of any description specified by the State Government or Commission. This information may be. (a) for the Commission's own purpose; or (b) for the purposes of the Government of India; or (c) for the purposes of the State Government; or (d) for the purposes of the Central Electricity Authority. (4) The licensee shall notify to the State Government and Commission as soon as possible of any major incident affecting any part or part of the total system which has occurred and shall within two months of the date of such major incident. (a) prepare report giving full details of the facts of the incident and its causes; and (b) furnish copies of the report to the State Government and Commission and to all parties involved in the major incident. 7. Disposal of assets :- (1) The licensee shall not dispose of or relinquish operational control over any asset unless permitted by the State Government or the Commission as the case may be. (2) In this condition. "asset" means any asset with a replacement cost in excess of Rs. 50 lakhs or such other figure at the State Government or the Commission, as the case may be, may specify for the time being and from time to time forming part of intended to form part of the transmission and bulk supply business or for any use in conjunction therewith and any legal or beneficial right, title or interest in land upon which any of the foregoing is situated; and "disposal" includes any sale, gift, transfer, lease, licence, the grant of any right of possession or ownership whether immediate or in the future, transfer of ownership, loan, security, mortgage, change o r grant of any other encumbrance or the permitting of any encumbrance to subsist or any other disposition to a third party and "dispose" shall be construed accordingly. 8. Health and safety :- The licensee shall duly comply with all health and safety requirements under the Indian Electricity Rules, 1956 and other applicable laws and regulations in force at the relevant time. 9. Application of Indian Electricity Act, 1910 (9 of 1910) and the Electricity (Supply) Act, 1948 (54 of 1948) :- (1) The licensee shall comply with the requirements of the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948 and rules made thereunder, to the extent they have not been disapplied under the Act, in carrying out its functions and obligations under this licence. (2) The State Government may publish an order authorising the licensee to exercise any power or authority which could be given to the licensee under the Indian Electricity Act, 1910 (9 of 1910) and the Electricity (Supply) Act, 1948 (54 of 1948). 10. Application of the Indian Telegraph Act, 1885 (13 of 1885) :- The licensee shall have all powers for the placing of appliances and apparatus for the transmission of electricity, that a telegraph authority possesses under the Indian Telegraph Act, 1885 (13 of 1885), with respect to the placing of telegraph lines and posts for t h e purposes of a telegraph established or maintained by the Government or to be so established or maintained. PART 3 Technical Conditions 11. Grid Code :- (1) Subject to paragraph 11(3) the licensee shall in consultation with generators, other licensees and persons materially affected thereby prepare as soon as possible and ensure that there is in force at all times a Grid Code and shall implement and comply. The Grid Code shall. (a) cover all material technical aspects relating to connections to the operation and use of the licensee's transmission system including the operation of electric lines connected to the Licensee's Transmission System; and (b) be designed so as to permit the development, maintenance and operation of an efficient, co-ordinated and economical system for the transmission for electricity in the Licensee's area of transmission and bulk supply. (2) Following consultation with generators, licensees and persons materially affected thereby as the State Government or Commission may consider appropriate, the State Government or the Commission as the case may be, may issue directions requiring the licensee to revise the Grid Code in such manner as may be specified in the directions, and the licensee shall forthwith comply with any such directions. (3) The State Government, or the Commission, as the case may be, may following consultations as it may consider appropriate with the licensee issue directions relieving the licensee of its obligations to implement or comply with the Grid Code in respect of such parts of the Licensee's transmission system or to such extent as may be specified in the directions. 12. Capacity procurement procedure :- (1) Except in the case of non- conventional sources of energy, the Licensee may not enter into any new arrangement to purchase electricity or arrangements for the construction of additional generation capacity, without an authorisation granted by the State Government or the Commission, as the case may be, under the terms of this paragraph. (2) An authorisation required under paragraph 12(1) will be granted when the licensee demonstrates to the satisfaction of the State Government or the Commission as the case may be, that. (a) there is need for the additional power which it proposes to purchase; (b) the licensee has examined the economic, technical, system and environmental aspects of all available alternatives to the proposals for purchasing additional electricity including arrangements for reducing the level of demand and such examination has been carried out in the manner approved by the State Government or the Commission as the case may be; and (c) the licensee will obtain tenders from independent power producers and other parties, specifying the prices and other terms on which they will sell electricity or construct and operate generating plant, the obtaining of such tenders to be in a manner approved by the State Government or the Commission, as the case may be. The restrictions imposed in paragraph 12(1) and 12(2) shall not be applicable for purchases or arrangements already contracted or in the process and such purchases or arrangements in the process shall be continued and finalised with the approval of the State Government. PART 4 Tariffs 13. Basis of charges :- (1) The tariffs notified by the KEB vide Board Notification No. KEB/B10/2424/97-98 dated 14-7-1998 or under other orders or instruments shall continue to apply and the KPTC shall be entitled to recover charges as per the above notification or orders or instruments till further orders as provided in paragraph 13(2). (2) The State Government or the Commission, as the case may be, may issue orders for separate tariffs for transmission, bulk supply or any other activity or services by the KPTC. The KPTC shall be entitled to recover the charges as per the revised orders from the date notified in the said orders. (3) Except as mentioned above the tariff shall be determined in accordance with the provisions of Section 27 of the Act.