9.4. The decision of the Commission as to what is a mayor incident shall be final.
9.5. Besides taking action for violation of the licence Conditions, the Commission shall be entitled to require the Licensee to file a report of any major incident in accordance with Paragraph 9.3 above in a situation where here the Commission reasonably believes a major incident has occurred but has not been reported by the Licensee.

10.5. In this Condition 10 "Disposal" includes any sale, gift, lease, licence, the grant of any right or possession (or ownership whether immediate or in the future), transfer of ownership loan, security, mortgage, charge or the 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.

11.4. The Licensee shall be entitled to reflect any fee paid by it under this Condition 11 in the determination of aggregate revenues made in accordance with Condition 21.

1. on the application of the Licensee or with the consent of the Licensee provided in each case that the requirements of Section 18(3) of the Act have been satisfied; or

2. if any amount payable under condition 11 is unpaid after it has become due and remains unpaid for a period of 30 days and such other time as the Commission may specify; or

3. if the Licensee has breached any conditions of this licence and does not comply with an order of the Commission to rectify such breach; or

4. if the Licensee fails to show to the satisfaction of the Commission within 30 days of a request from the Commission that the Licensee is in a position to full and efficiently discharge the duties and obligations imposed on the Licensee by this licence; or

5. if, in the opinion of the Commission the Licensee's financial position is such that the Licensee is unable fully and efficiently to discharge the duties and obligations Imposed on the licensee by this licence or

6. if in the opinion of the Commission the Licensee has committed a willful or unreasonable default in doing anything required of it under the Act, the Indian Electricity Act, 1910 (9 of 1910) or the Indian Electricity (Supply) Act 1948 (54 of 1948) or rules made thereunder.

13. Dispute Resolution:
Notwithstanding anything contained in the Arbitration Law, the Commission shall have the power to act as arbitrator or to nominate an arbitrator or arbitrators to adjudicate and settle disputes arising between the Licensee and any other person who is the holder of a licence pursuant to the Act and issues relating to the Licensee arising under Section 33 of the Act in accordance with the Act and the Regulations to be prescribed pursuant to the Act.

14. Indian Electricity Act, 1910 (9 of 1910) and Indian Electricity (Supply) Act, 1948 (54 of 1948):
14.1. Except as otherwise provided herein none of the clauses of the schedule to the Indian Electricity Act, 1910 (9 of 1910) shall be incorporated into this Licence.
14.2. The Licensee shall provide an Electrical Inspector or person authorised by an Electrical Inspector (hereinafter referred to in this Condition 14 as the "authorised person") with facilities for inspecting and testing the Licensee's works and for the reading, testing or inspection of any instrument. A person appointed by the Licensee may be present at the testing of its works or the reading, testing or inspection of any instruments, but shall not interfere with the reading testing or inspection.
14.3. Prior to the testing of any works of the Licensee by an Electrical Inspector or authorised person reasonable notice of the testing shall be given to the Licensee. The testing shall be carried out at such times as shall (in the opinion of the Electrical Inspector or the authorised person) least interfere with the supply of energy by the Licensee and in such manner as the electrical Inspector or the authorised person may think fit. Except pursuant to an order made for that purpose by the State Government, the Electrical Inspector or authorised person shall not be entitled to have access to, or interfere with, the works of the Licensee at any points other than those at which the Licensee itself has access. The Licensee shall not be responsible for any interruption or irregularity in the supply of energy which may be occasioned by, or required by the Electrical Inspector or the authorised person for the purpose of, any testing pursuant to this Paragraph 13.6. No testing shall take place in respect of any works or part thereof more than once in any period of three months, unless it is pursuant to an order made by the State Government.
14.4. The Commission 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).
14.5. Pursuant to Section 10(8) of the Act, the Licensee shall have all the powers for the placing of appliances and apparatus for the transmission of electricity that a telegraph authority possess under the Indian Telegraph Act 1885 (13 of 1885).

PART III: TECHNICAL CONDITIONS:

15. Power Procurement Procedure:
15.1. The Licensee shall not commence any process to purchase electricity without an authorization granted by the Commission under the terms of this Condition 15.
15.2. The Licensee shall purchase power in an economical and efficient manner under a transparent procurement process as approved by the Commission except for purchases of allocated share of power from Central sector generation and inter-utility exchanges of power under Eastern Region Electricity Board to which such processes as the Commission may approve, shall apply.
15.3. An authorisation required under Paragraphs 15.1 will be granted when the Licensee has demonstrated to the Commission's satisfaction that:

1. the additional power is necessary to meet the Licensee's service obligation in accordance with Condition 20,

2. 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 a manner approved by the Commission, and

3. the Licensee will obtain tenders from independent power producers and other parties, specifying the prices and other terms on which they will sell electricity, the obtaining and finalisation of such tenders to be in a manner approved by the Commission.

15.4. The restriction imposed in paragraph 15.1 shall not be applicable for short term (less than six months) purchases provided that the details of such purchases shall be submitted to the Commission for approval within 30 days of effective date of purchase.

16. Investment:
16.1. The Licensee may not enter into any new arrangements to make a major investment without an authorization granted by the Commission under the terms of this Condition 16. A series of procurement that are not major investments individually but constitute a coherent project when considered in total is deemed to be a major investment for the purposes of this Paragraph 16.1.
16.2. The Commission shall grant an authorization required under Paragraph 16.1 when the Licensee demonstrates to the Commission's satisfaction that

1. there is a need for the major investment in the Transmission System which the Licensee proposes to undertake;

2. the Licensee has examined the economic, technical, system and environmental aspects of all available alternatives to the proposals for investing in or acquiring new Transmission System assets and has complied with the provision of Section 29 of the Electricity Supply Act 1948; and

3. the Licensee will obtain tenders from vendors specifying the prices and other terms on which they will supply equipment or materials or works comprising all or a significant part of a major investment. The general procedure of inviting and accepting tenders shall be in a manner approved by the Commission.

16.3. For the purposes of Paragraphs 16.1 and 16.2 the term major investment shall mean a planned investment or asset procurement of Rs.10 crore or more, involving the acquisition of major transmission facilities and "investment" as used herein, may include the acquisition of the asset through a contract, lease or construction.

17. Grid Code:
17.1. The Licensee, except as provided in Paragraph 17.2 shall ensure that there is in force at all times a Grid Code which meets the requirements of this Condition 17. The Licensee shall implement and comply with (subject to Paragraph 17.8) such Grid Code. Such Grid Code shall be prepared by the Licensee in consultation with other Electricity Operators, Central Generating Stations and other utilities In the region likely to be materially affected by it and it shall:

1. cover all material technical aspects relating to connections to and the operation and use of the Licensee's Transmission system including the operation of electric lines and electrical plant connected to the Licensee's Transmission system in so far as relevant to the operation and use of the Licensee's Transmission System; and

2. be designed so as to permit the development maintenance and operation of an efficient, coordinated and economical system for the transmission of electricity in the State of Orissa.

17.2. Where no Grid Code of the form provided for in this Condition 17 is in force at the effective date of this licence, the Licensee shall not be considered in breach of this licence Condition 17 provided that:

1. within one month or such other time as the Commission may allow from the commencement of this licence the Licensee submits an Operating Grid Code to the Commission;

2. the Licensee shall implement and comply with the Operating Grid Code from the date of its submission to the Commission;

3. within six months of the commencement of the licence, the Licensee shall submit a comprehensive Grid Code (as referred in Para 17.1 above) which must be formulated after consultation with the electricity operators and other affected interested groups to the extent possible;

4. the Licensee shall be obliged to implement the aforesaid Grid Code in accordance with the amendment/approval of the same by the Commission.

17.3. The Licensee shall (in consultation with Electricity Operators liable to be materially affected thereby) periodically review (including upon the request of the Commission) the Grid Code and its implementation. Following any such review, the Licensee shall send to the Commission :

1. a report on the outcome of such review: and

2. any proposed revisions to the Grid Code from time to time as the Licensee reasonably thinmks fit for the achievement of the objectives referred to in sub-paragraph (b) of paragraph 17.1; and

3. all written representations or objections from Electricity Operators arising during the consultation process.

17.9. The Commission may (following consultation 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 and/or to such extent as may be specified in the directions.

18. Compliance with Distribution Code:
18.1. The Licensee shall comply with the provisions of the Distribution Code of any Electricity Operator Authorised to distribute and supply electricity at retail, in so far as applicable to it.
18.2. The Commission may (following consultation with any Electricity Operator Authorised to distribute and Supply electricity at retail which is directly affected thereby) issue directions relieving the Licensee of its Obligation under Paragraph 18.1 in respect of such parts of the Distribution Code of any Electricity Operator to such extent as may be specified in those directions.

20. Planning and Security Standards; Power Supply Planning and Security Standards; Operating Standards; and Power Supply Operating Standards:
20.1. The Licensee shall plan and operate the Licensee's Transmission System so as to ensure that the Licensee's Transmission system is capable of providing an efficient co-ordinated and economical system of electricity transmission. In particular the Licensee shall plan and develop its Transmission System in accordance with Planning and Security Standards, and operate its Transmission System in accordance with Operating Standards.
20.2. The Licensee shall comply with any directions given by the State Government under Section 22(A) and 22(B) of the Indian Electricity Act 1910 (9 of 1910).
20.3. The Licensee shall make arrangements to provide for sale to Distribution and Retail supply Licensees sufficient electricity to meet Power Supply Planning and Security Standards and Power Supply Planning Operating Standards approved by the Commission.
20.4. The Power Supply Planning and Security Standards are such standards as:

1. will ensure that the Licensee conducts its planning so that the Bulk Supply of electricity to Customers will meet levels of reliability and quality, to be proposed by the Licensee and approved by the commission by reason of sufficiency of power available for the purposes of Supply to Consumers; or

2. the Commission may otherwise specify.

20.5. The Power Supply Operating Standards are such levels of operational security and quality of supply as are proposed by the Licensee to the Commission and approved by the Commission.
20.6. The Licensee shall not be considered in breach of the requirements of Paragraph 20.3 in circumstances where, for reasons accepted by the Commission, the Licensee has been unable to provide sufficient power.
20.7. Notwithstanding Paragraph 20.6 in all circumstances where the Licensee has not provided sufficient Bulk Supply of power to meet actual demands, the Licensee shall nevertheless use its best endeavours to meet all demands as fully as is reasonably possible.
20.8. The Licensee shall, within three months or such other time as the Commission may allow after this licence is granted, prepare and submit to the Commission for approval the Licensee's proposal for Planning and Security Standards, Power Supply Planning and Security Standards, Operating Standards, and Power Supply Operating Standards in accordance with Paragraphs 20.1, 20.4 and 20.5 above. The proposal should include a statement setting out criteria by which the Licensee's compliance with such Standards may be measured. Such criteria should include the number and type of deviations from the Bulk Supply reliability and quality standards specified in Paragraph 20.4(a)
20.9. The document in which the Planning and Security Standards and Operating Standards are set forth pursuant to Paragraphs 20.1 and 20.8 above must include a statement by the Licensee as to how it proposes to implement the standards so as to;

1. ensure a satisfactory degree of standardization of plant apparatus and equipment within the State of Orissa, and

2. develop and observe a policy on spare parts required

20.10. The Licensee shall within 3 months of the end of each financial year submit to the Commission a report indicating the performance of the Licensee's Transmission System during the previous financial year against the relevant criteria referred to in Paragraph 20.8 and of the Licensee during the previous financial year against the relevant Bulk supply criteria referred to in Paragraph 20.8. The Licensee shall, if required by the Commission publish a summary of the reports in a manner to be determined by the Commission.
20.11. The Licensee shall on an annual basis or more frequently if requested by the Commission:

1. forecast the demand for power within the Area of supply in each of the next succeeding 10 years; and

2. prepare and submit to the Commission for approval such long term (10 years) demand for power or load forecasts for the power system in Orissa. and. in particular. provide to the Commission details of the demand forecasts and the data. methodology and assumptions on which those forecasts are based.

20.12. The Licensee shall, upon request by the Commission provide to the Commission such information the Commission may require under or for the purpose of monitoring compliance with this condition 20.

21. Basis of Charges:
21.1. The Licensee shall by Thirty First of December of each year, prepare and lodge with the Commission submissions setting out in full detail:

1. A statement of the Licensee's revenue requirement for the ensuing financial year prepared in accordance with the financial principles provided in Sections 57 and 57 A of the Electricity (Supply) Act, 1948 and in the sixth schedule thereto, with departures therefrom as authorised by the Commission.

2. A statement of the Licensee's expected revenue for the ensuing financial year, at the prevailing tariff rates.

21.2. If the Licensee desires, or the Commission directs, to amend the current tariff rates and charges, the Licensee shall prepare and lodge with the Commission, its application for such tariff amendments setting out in full the following, provided that no tariff or part of tariff shall be amended more than once in any financial year except for a fuel surcharge adjustment expressly permitted by the Regulation.

1. amended charges and tariffs which the Licensee proposes to apply from the date specified in the submission (such date to be not less than 90 days after the date of the submission) for the supply of electricity pursuant to the Transmission & Bulk Supply Business, drawing attention to any proposed changes from those applying in the current financial year;

2. the aggregate revenue which the Licensee expects to be able to recover from the proposed amended tariffs and charges for the supply of electricity, such aggregate revenue figure to relate to the first full financial year after the proposed specified date, where the specified date coincide with the beginning of the financial year, where the specified date does not coincide with the beginning of the financial year the aggregate revenue figure will be calculated at the prevailing tariff rate upto the date of revision and thereafter at the revised rate upto end of the financial year;

The Commission may require comparative data for the current and/or any proceeding year, for purpose of comparison, along with such other data, calculation etc. as the Commission consider necessary, and the licensee shall furnish such data, calculations, comparisons as directed by the Commission.
21.3. The submission submitted to the Commission pursuant to paragraph 21. I shall include a schedule of tariffs for the supply of electricity to customers which:

1. shall be in accordance with the provisions of sections 12(3) and 26 of the Act; and

2. as far as possible, ensure that the Licensee will be able to recover the total revenue referred to in the submission submitted by the Licensee pursuant to paragraph 21.1 (a). The schedule of tariffs may, subject to the provisions of Condition 8, differentiate by type and size of customers and any other relevant factors.

21.4. Within 90 days of the receipt of submission, under this condition 21 and receipt of information/clarification on the said submission, whichever is later, the commission shall notify the Licensee:

1. that it approves the submission; or

2. that it does not approve all or any part of the submission.

Provided however the Commission has had consultations with the Commission Advisory Committee where required.
21.5. Where, in accordance with paragraph 21.4, the Commission notifies the Licensee that it does not approve the whole or part of any submission the Commission may at the same time:

1. require the Licensee to recalculate and lodge the submission in accordance with paragraph 21.1 or 21.2 above:

   1. according to such principles or other guidelines or recommendations as the Commission may specify; and

   2. within such further period as the Commission may specify; and/or

2. propose any modification to the whole or any part of the submission, such modification to be binding on the Licensee which shall revise and lodge the submission under the terms of paragraphs 21.1 and 21.2 and in accordance with the proposed modification.

21.6. Following approval by the Commission of any amended charges or tariffs, the Licensee shall publish details of the charges or tariffs in accordance with the requirements of Section 26(5) of the Act. The previously notified tariff and charges shall remain in effect till the amended tariffs and charges take effect.
21.7. The Licensee shall ensure that all amounts due to other Electricity Operators in respect of the electricity generated or supplied or other goods or services provided by them pursuant to their Authorised activities shall be paid promptly.
21.8. Pursuant to Section 15(9) of the Act, the Licensee shall he entitled to exercise any power or authority to take appropriate actions for:

1. revenue realisations;

2. prosecution for theft;

3. deterring tampering with meters; and

4. preventing diversion of electricity;

and all such similar matters affecting the Transmission and Bulk Supply of electricity.

PART IV: CONNECTION AND USE OF SYSTEM CONDITIONS:

22. Requirement to Offer Terms for Use of System and Connection to System:
22.1. The Licensee shall make such arrangements for the use of the Licensee's Transmission system by third parties as are specified in this Condition 22. If there are Authorized Bulk Suppliers other than the Licensee, on application made by any such Bulk supplier the Licensee shall offer to enter into an agreement with the relevant Electricity Operator for the use of the Licensee's Transmission System:

1. to accept into the Licensee's Transmission System electricity provided by another Bulk supplier pursuant to arrangements authorised by the Commission;

2. to deliver such quantities as adjusted for losses of electricity to an Electricity Operator who is Authorised to Supply electricity;

3. that specifies tariff and Use of System charges to be paid by the user, which are in accordance with Condition 21.

22.2. On application made by a person carrying out Retail supply the Licensee shall offer to enter into an agreement with the relevant Electricity Operator for connection to the Licensee's Transmission System or for modification of such an existing connection and such offer shall make provision for:

1. the carrying out of works necessary to make the required connection, including the installation of meters;

2. the carrying out of any necessary` works to reinforce the Licensee's Transmission System

3. the connection charges to be paid in accordance with Condition 21; and

4. the completion date and such other terms as are relevant to the circumstances.

22.3. The Licensee shall offer terms for agreements in accordance with Paragraphs 22.1 or 22.2 as soon as practicable and (save where the Commission consents to a longer period) in any event no more than two months after an application under such Paragraphs is made.
22.4. The Licensee shall not be obliged pursuant to this Condition 22 to offer to enter or to enter into any agreement if:

1. to do so is likely to involve the Licensee:

   1. in breach of its duties under Section 17 of the Act: or

   2. in breach of any rules or Regulations relating to safety or standards applicable to the Transmission Business including, the Indian Electricity Rules 1956; or

   3. in breach of the Grid Code; or

   4. in breach of any of the Conditions of this license or,

2. the person making the application does not undertake to comply with the Grid Code from time to time in force to the extent that it is applicable to that person; or

3. in the case of persons making application for Use of System under Paragraph 22.1, such person ceases to be a Bulk Supplier.

22.5. If, after a period which appears to the Commission to be reasonable for the purpose, the Licensee has failed to enter into an agreement with any applicant referred to in Paragraphs 22.1 and 22.2 pursuant to a request under this Condition 22, the Commission may on application of such person or the Licensee settle any terms of the agreement in dispute between the Licensee and that person and the Licensee shall forthwith enter into and implement such agreement in accordance with its terms as settled by the Commission.
22.6. The Licensee shall prepare and submit to the Commission on an annual basis. a statement showing in respect of each of the (five) succeeding financial years forecasts of circuit capacity, power flows and loading on the Licensee's Transmission System under standard planning criteria together with:

1. such further information as shall be reasonably necessary to enable am person seeking Use of System to identify and evaluate the opportunities available when connecting to and making use of such system; and

2. a commentary prepared by the Licensee indicating the Licensee's views as to those parts of the Licensee's Transmission System most suited to new connections and transport of further quantities of electricity.

At the request of an Electricity Operator which wishes to use the Licensee's Transmission System under Paragraphs 22.1 or 22.2, the Licensee shall prepare an update to the above statement, incorporating most recent data but specifically including any facility for which any other Bulk Supplier has requested use and connection to the Licensee's Transmission System.
22.7. The Licensee may make a charge for any statement given or sent to persons seeking use of system of an amount reflecting the Licensee's reasonable costs of providing such a statement.

PART V: SEPARATION OF FUNCTIONS AND COMPETITION CONDITIONS:

23. Separation of Functions:
The Commission may, after consultation with all Electricity Operators (including the Licensee in its capacities as Transmission Licensee and Bulk Supply Licensee) in the Area of Transmission and Supply, formulate arrangements to require that the Transmission Business and the Bulk Supply Business be carried out under separate Licences. The Commission may issue necessary orders making relevant changes in this Licence.

24. Introduction of Competition in Bulk Supply:
The Commission may, after consultation with all Electricity Operators (including the Licensee in its capacities as operator of the Licensee's Transmission System and as Bulk Supplier) in the Area of Transmission and Bulk supply formulate arrangements for the introduction of competition in the Bulk Supply of electricity in the Area of Transmission and Bulk Supply in accordance with the provisions of this licence The Commission may Issue necessary orders making relevant ant changes in this licence.

PART VI: PENALTY:

25. Penalty for contravention of provisions of the Licence:
25.1. The Licensee shall be liable for action under Section 41 of the Act in appropriate cases.

SCHEDULE 1:
Area of Transmission and Bulk Supply:
The Area of Transmission and Bulk Supply shall comprise the State of Orissa excluding cantonment, aerodrome, fortress, arsenal, dockyard or camp or any building or place in occupation of the Central Government for defence purposes.