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The Odisha Transmission & Bulk Supply Licence 1997 (No. 2/97)

ANNEXURE 'B'

Licence for the Supply of electricity granted by the Odisha Electricity Regulatory commission under Section 15 of the Odisha Electricity Reform Act 1995 (2 of 1996) to GRID CORPORATION OF Odisha LIMITED, JANPATH BHUBANESWAR - 751 007 (GRIDCO) for carrying out the business of Transmission and Bulk Supply of electrical energy within the Area of Transmission arid Bulk Supply and with the powers and upon the terms and conditions specified below.

TABLE OF CONTENTS:

PART I: Terms of the Licence

1. Short Title

2. Definition

3. Term of Licence

PART II: General Conditions

4. Regulations

5. Prohibition Activities

6. Prohibition of Subsidies among Separate Businesses

7. Separate Accounts for Separate Business

8. Prohibition of Discrimination

9. Provision of Information to the Commission

10. Disposal of Assets

11. Payment of Fees

12. Terms as to Revocation

13. Dispute Resolution

14. Indian Electricity Act, 1910 (9 of 1910) & Indian Electricity (Supply) Act, 1948 (54 of 1948)

PART III: Technical Conditions

15. Power Procurement Procedure

16. Investment

17. Grid Code

18. Compliance with Distribution Code

19. Central Scheduling and Despatch

20. Planning and Security Standards; Power Supply Planning and Security Standards; Operating Standards; and Power Supply Operating Standards

21. Basis of Charges

PART IV: Connection and Use of System Conditions

22. Requirement to Offer Terms for Use of System and Connection to system

PART V: Separation of Functions & Competition Conditions

23. Separation of Functions

24. Introduction of Competition in Bulk Supply

PART VI: Penalty

25. Penalty for contravention of provisions of the Licence

Schedule I: Area of Transmission and Bulk Supply

PART I: TERMS OF THE LICENCE:

1. Short Title:
1.1. This licence may be called "The Odisha Transmission and Bulk Supply Licence, 1997 (2/97)"

2. Definition:
2.1. The words, terms and expressions to which meanings are assigned by the Odisha Electricity Reform Act, 1995 (2 of 1996) and rules and regulations made thereunder, shall have the same meanings in this licence.
2.2. Words, terms and expressions used in this licence which are not defined in this licence, or in the Odisha Electricity Reform Act 1995 (2 of 1996) shall have the meanings given to them in the Indian Electricity Act, 1910 (9 of 1910) and the Electricity (Supply) Act, 1948 (54 of 1948).
2.3. In this license unless the context otherwise requires:

"Act"	means the Odisha Electricity Reform Act. 1995 (2 of 1996)
"Affiliate"	means in relation to the Licensee, any Holding company or Subsidiary of the Licensee, or any Subsidiary of a Holding Company of the Licensee
"Area of transmission and Bulk Supply"	means the geographic area referred to in Schedule I of this Lieence within which any activity Authorised by this licence is allowed
"Auditors"	means the licensee's auditors for the time being holding office in accordance with the requirements of Sections 224 to 234A of the Companies Act 1956 (1 of 1956)
"Authorised"	in relation to any business or activity means authorised by licence granted under Section 15 or exemption granted under Section 16 of the Act
"Bulk Supply"	means the provision of electricity to a Licensee for resale
"Bulk Supplier"	means any person who is Authorised to carry out Bulk Supply
"Bulk Supply Business"	means the Authorised business of a Licensee in Bulk Supply
"Consumer"	means the end or final user of electricity
"Customer"	means any Electricity Operator supplied with electricity for resale
"Distribution"	means the transportation of electricity by means of a Distribution system
"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) the Retail Supply of electricity to Consumers
"Distribution code"	means in relation to any Distribution and Retail Supply Licensee, the code covering all material technical aspects relating to connections to the Distribution System owned and/or operated by the Licensee planning conditions to be applied by the Licensee in the development of the distribution System. and (in so far as relevant to the operation and use of the Distribution System) the operation of electric lines and electrical plant connected to the Licensee's Distribution System or the Distribution System of any Licensee
"Distribution System"	means any system consisting of mainly of cables service lines and overhead lines, electrical plant and meters having design voltage of 33 KV and under, owned and/or operated by a Distribution and Retail Supply Licensee and used for the transportation of electricity from a Transmission System or Generating Sets or other points to the point of delivery to Consumers and includes any electrical plant and meters owned and/or operated by the Licensee in connection with the Distribution of electricity. The Distribution system shall not Include any part of a Transmission System. except where used for the Supply of electricity to a single Consumer or group of Consumers
"Electricity Operator"	means any person who owns and/or operates generating plant or who holds a licence under Section 14 of the Act, connected to the Licensee's transmission system and any Bulk Supplier
"Generating Set"	means any plant or apparatus for the production of electricity and shall where appropriate include a generating station comprising of more than one generating unit
"Generator Interconnection Facilities"	means any transformers, busbars, switchgear, plant or apparatus utilised to enable access to a Transmission / Distribution System by the Generating Sets
"Grid Code"	means the code covering all material technical aspects relating to connections to and the operation and use of a Transmission System or (in so far as relevant to the operation and use of a Transmission system) the operation of electric lines and electrical plant connected to the Transmission system or the Distribution System of any Electricity Operator including the Licensee's Transmission system
"Licensee"	means The Grid Corporation of Odisha Limited constituted under Section 13 of the Act
"Licensee's Distribution System"	means any Distribution system owned and/or operated by a Distribution and Retail Supply Licensee
"Licensee's transmission System"	means the a Transmission system of the Transmission & Bulk supply License
"Operating Standards"	means the standards approved by the commission pursuant to Condition 20
"Planning and Security Standards"	means the standards approved by the Commission pursuant to Condition 20
"Power Supply Planning Standards"	means the standards approved by the Commission pursuant to Condition 20
"Power Supply Planning and Security Standards"	means the standards approved by the Commission pursuant to Condition 20
"Regulations"	means Regulations issued by the Commission under Section 54 of the Act
"Retail Supply"	means sale of electricity to Consumers
"Separate Business"	means each of the Transmission Business, the Bulk Supply Business, the Distribution and Retail Supply Business and any Commission authorised non core activity taken separately from one another and from any other business of the Licensee or any affiliate of the Licensee
"Supplier"	means any Electricity Operator who carries out or provides Bulk supply or Retail Supply
"Supply"	means the provision of electricity either for resale or directly to Consumers
"Total System"	means Generator Interconnection Facilities, the Licensee's Transmission system the Licensee's Distribution system and the Distribution Systems of all Electricity Operators which are located in the Area of Transmission
"Transmission Business"	means the Authorised business of a Licensee in Transmission
"Transmission System"	means the system consisting of extra high voltage electric lines having design voltage of 66 KV and higher owned and/or operated by a Licensee Authorised to transmit electricity for the purposes of the transportation of electricity from one power station to a substation or to another power station or between sub-stations or to or from any external interconnection including 33/11 KV bays/equipment up to the interconnection with the distribution system, any plant and apparatus and meters owned or used in connection with the transmission of electricity, but shall not include any part of a Distribution System
"Use of System"	means use of the Licensee's Transmission System for the transfer of electricity by any Supplier pursuant to a contract entered into under the terms of Paragraph 20

3. Term of Licence:
3.1. The Commission in exercise of the powers conferred by section 15 of the Act hereby grants to the Licensee licence for Transmission and Bulk Supply of electricity in the Area of Transmission during the period specified in Paragraph 3.3 subject to the conditions set out in Parts II, III, IV, V and VI of this licence.
3.2. The Conditions are subject to modification or amendment in accordance with their terms, the provisions of conditions 23 and 24 or with the provisions of the Act.
3.3. This licence shall come into force on First of April 1997 and unless revoked earlier shall remain in force for 30 years from date of issue and may upon agreement of the Commission and the Licensee, be renewed for another period of 20 years.

PART II: GENERAL CONDITIONS:

4. Regulations:
4.1. The Licensee shall comply with, adhere to, and obey the Odisha Electricity Regulatory Commission Regulations, directions and orders as may be issued by the Commission from time to time.

5. Prohibited Activities:
5.1. In the State of Odisha, neither the Licensee nor any of its Affiliates shall:

purchase or otherwise acquire electricity or sell or otherwise transfer electricity to any person other than pursuant to a licence granted by the Commission except that the Licensee shall be permitted to enter into arrangements for the purchase of ancillary services and sale of power surplus to the need of the State to other State Electricity Boards/Licensee With prior approve al of the Commission; or
own hold any beneficial interest in, or operate, any Generating Set or other sources of production of power without the prior written approval and on such conditions deemed appropriate by the Commission except in a manner incidental to its authorised business; or
own hold any beneficial interest in, or operate, any facilities for the Transmission or Distribution of electricity in the Area of Transmission other than pursuant to a licence granted by the Commission; or
start any non-core activity which is not reasonably incidental to its function as a Licensee, unless specifically authorised by the Commission. Any non-core business so authorised by the Commission will be treated in the same manner as a Separate Business for the purposes of Condition 7

5.2. The Transmission Business, the Bulk Supply Business, and the Distribution and Retail Supply Business shall not be held by or carried on through any Affiliate of the Licensee, unless otherwise permitted by the Commission.
5.3. The licensee shall not guarantee any obligations incurred by an affiliate of the licensee in respect of a non-core activity. In carrying on the Transmission and Bulk Supply Business, the Licensee shall not make any loan or loans to any other Separate Business or non-core activity of the Licensee.
5.4. The Licensee shall not create or permit to subsist any encumbrance in favour of any other person over any of the Licensee's assets for the purposes of securing any obligation of any other person or of the Licensee in relation to any non-core activity.
5.5. For the purposes of this condition the terms ''ancillary services", "encumbrance" and "non-core activity" shall have the following meanings:

"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 on the Lieensee's Transmission System
"encumbrance"	means any mortgage, charge right of possession, assignment by way of security or other form of security interest
"non-core activity"	means any activity of the Licensee or an Affiliate of the Licensee other than that carried on as a part of the Transmission and the Bulk Supply Business.

6. Prohibition of Subsidies among Separate Businesses:
In respect of each Separate Business the Licensee shall not, without prior permission of the Commission, give any subsidy to or receive any subsidy from any other Separate Business or from any other business of the Licensee or any Affiliate of the Licensee.

7. Separate Accounts for Separate Businesses:
7.1. The first financial year of the license shall run from First of April 1997 to Thirty first of March 1998 and thereafter each financial year of the license shall run from First of April to the following Thirty First of March.
7.2. The Licensee shall in respect of each Separate Business (whether or not carried on by a separate company:

keep such accounting records as required by the Commission to be kept in respect of each such Separate Business if it were carried on by a separate company, so that the revenues, costs, assets, liabilities, reserves, and provisions of, or reasonably attributable to, each Separate Business are separately identifiable in the books of the Licensee from those of any other Separate Business or other business; and
prepare on a consistent basis from such accounting records:
1. for each financial year account statements comprising a profit and loss account, a balance sheet and a statement of source and application of funds together with notes thereto and showing separately in respect of each Separate Business the amounts of any revenue, cost, asset, liability, reserve, or provision which has been either:
  (A) charged from or to any other business (whether or not a Separate Business) together with a description of the basis of that charge, or
  (B) determined by apportionment or allocation between any Separate Business and am other business (whether or not a Separate Business) together with a description of the basis of the apportionment or allocation, and
2. In respect of the first six months of the first financial year and of each subsequent financial year an interim profit and loss account, and
provide, in respect of the accounting statements prepared in accordance v, with this Condition 7, a report in respect of each financial Year, by the Auditors, stating whether in their opinion those statements have been properly prepared in accordance with this Condition 7 and give a true and fair view of the revenues, costs, assets, liabilities, reserves and provisions of, or reasonably attributable to the Separate Business to which the statements relate, and
deliver to the Commission a copy of each interim 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.

7.3. Unless permitted to do so by the Commission. the Licensee shall not change the bases of charge or apportionment or allocation referred to in sub-paragraph (b)(i) of Paragraph 7.2 in relation to the accounting standards in respect of a financial year from those applied in respect of the previous financial year.
7.4. Where in relation to the accounting statements in respect of a financial year the licensee proposes to change such bases 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 proposes to adopt, also prepare such accounting statements on the bases which applied in respect of the immediately preceding financial year.
7.5. Accounting statements in respect of a financial year prepared under sub-paragraph (b)(i) of Paragraph 7.2 shall, unless otherwise approved or directed by the Commission:

keep such accounting records as required by the Commission to be kept in respect of each such Separate Business if it were carried on by a separate company, so that the revenues, costs, assets, liabilities, reserves, and provisions of, or reasonably attributable to, each Separate Business are separately identifiable in the books of the Licensee from those of any other Separate Business or other business; and
state the accounting policies adopted; and
(with the exception of the part of such statement which shows separately the amounts charged, apportioned or allocated and describes the bases of charge or apportionment or allocation respectively), be published with the annual accounts of the licensee in the manner prescribed in the Regulations.

7.6. References this Condition 7 to costs or liabilities of or reasonably attributable to any Separate Business shall be construed as excluding taxation, capital liabilities which do not relate principally to that Separate Business and Interest thereon.
7.7. The licensee shall ensure that the accounting statements in respect of each financial year prepared under sub-paragraph (b)(i) of Paragraph 7.2 and the Auditor's report in respect of each financial year referred to in sub-paragraph (c) of Paragraph 7.2 are made available to any person requesting them at a price not exceeding fair copying charges.

8. Prohibition of Discrimination:
8.1. Subject to Paragraph 8.2 where under the terms of this licence the Licensee provides Use of System or connection services, the Licensee shall not (unless authorised by the Commission or pursuant to Paragraph 8.2) unduly discriminate in respect of price or other terms:

between any users or classes of users of the Licensee's Transmission system
as between the Licensee (in the use of the Licensee's Transmission System by the Licensee as part of its Bulk supply Business) and any other users or classes of users

8.2. Nothing in Paragraph 8.1 shall prohibit the Licensee from providing Use of System services to one user on price or other terms which materially differ from those offered to other users where such differences reflect different circumstances of service including load factor, power factor, the level and timing of peak demand and any other relevant factors.
8.3. Subject to Paragraph 8.4, the Licensee shall not, and shall ensure that any Affiliate of the Licensee shall not, supply or sell or offer to supply or sell electricity to any one Customer on terms as to price or other relevant matters which are materially more or less favourable than those on which it supplies or sells or offers to Supply or sell electricity to comparable Customers.
8.4. Nothing in Paragraph 8.3 shall prohibit the Licensee from selling or supplying electricity to one customer on price or other terms which materially differ from those offered to other customers where such differences reflect different circumstances of supply or sale to such Customers including quantity, load factors, power factor, the level and timing of peak demand, conditions of interruptability. and duration of the agreement, or any other relevant factor.

9. Provision of Information to the Commission:
9.1. The Licensee shall supply to the Commission in the manner and at the times specified by the Commission such information as the Commission may direct.
9.2. Without prejudice to the generality of Paragraph 9.1, the Commission may require the Licensee to supply accounting information which is more extensive than or differs from that required to be prepared and supplied to the Commission under Condition 7 or which shall be required by the Government of India or the Government of Odisha.
9.3. The Licensee shall notify the Commission as soon as possible of any major incident affecting any part of the Total System which has occurred and shall, within 2 months of the date of such major incident:

submit a report giving full details of the facts of the incident and its cause. The Commission at its own discretion may require the submission of a report to be prepared by an Independent person at the expense of the Licensee; and
give copies of the report to the Commission and to all parties involved in the major incident.

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. Disposal of Assets:
10.1. The Licensee shall not dispose of or relinquish operational control over any land and building of whatever value and any other assets with replacement cost in excess of Rs. 30 lakh otherwise than in accordance with following paragraphs of this Condition 10.
10.2. Save as provided in Paragraph 10.3 the Licensee shall give to the Commission not less than two months' prior written notice of its intention to dispose of or relinquish operational control over any asset. Notice shall not be deemed to have been given until such time as the Licensee has provided to the Commission all such further information as the Commission may require.
10.3. Notwithstanding Paragraph 10.1, the Licensee may dispose of or relinquish operational control over any asset as is specified in any notice given under Paragraph 10.2 if:

the Commission confirms in writing that it consents to such disposal or relinquishment subject to such condition as the Commission may impose; or
the Commission does not inform the Licensee in writing of am objection to such disposal or relinquishment of control Within the notice period referred to in Paragraph 10.2.

10.4. Notwithstanding Paragraphs 10.1 and 10.2, the Licensee may dispose of or relinquish operational control over any asset:

where:
1. the Commission has issued directions for the purposes of this Condition 10 containing a general consent (whether or not subject to conditions) to:
  (i) transactions of a specified description, and/or
  (ii) the disposal of or relinquishment of operational control over assets of a specified description; and
2. the transaction or the assets are of a description to which such directions apply and the disposal of or relinquishment is in accordance with any conditions to which the consent is subject; or
under such contracts agreements executed before the commencement of this Licence; or
where the disposal or relinquishment of operational control in question is required by or under any enactment or subordinate legislation.

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. Payment of Fees:
11.1. Within 30 days, or such other period as the Commission may allow after the coming into force of this licence the Licensee shall pay to the Government of Odisha an initial annual fee of Rs.50 lakh.
11.2. For each subsequent year that this licence remains in force, the Licensee shall by 10th of April of every year, be liable to pay to the Government of Odisha an annual licence fee of Rs.50 lakh. The Commission shall review and may change the level of such fee every three years.
11.3. Where the Licensee fails to pay to the Government of Odisha any of the fees due under Paragraph 11.1 or 11.2 by the dates specified,:

the Licensee shall be liable to pay to the Government of Odisha interest on the outstanding amount at a simple interest rate of 2% per month, the interest being payable for the period beginning on the day after which the amount becomes due, and ending on the day on which the Government of Odisha receives payment, and
the Licensee shall be subject to the proceedings for the recovery of such fees specified in the Act, and
the Commission may revoke this licence pursuant to Section 18 of the Act and Condition 12 of this licence.

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.

12. Terms as to Revocation:
The Commission may, provided that the requirements of Section 18(4) of the Act have been satisfied at any time revoke this licence by not less than 3 months notice in writing to the Licensee:

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

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

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

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

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

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:

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

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

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
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 Odisha.

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:

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

a report on the outcome of such review: and
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

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

17.4. All revisions to the Grid Code shall require approval from the Commission.
17.5. The Commission 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.
17.6. The Grid Code shall include but not be limited to:

connection conditions specifying the technical design and operational criteria to be complied with by the Licensee and by any person connected or seeking connection with the Licensee's Transmission system or by any person Authorised to generate who is connected with or seeks connection with the transmission or the Distribution System of any Electricity Operator (including the Licensee's Distribution System) which is located in the Area of Transmission;
an operating code specifying the conditions under which the Licensee shall operate the Licensee's Transmission System and under which Electricity Operators shall operate their plant and/or Distribution Systems (including the Licensee's Distribution System) in relation to the Licensee's Transmission System in so far as necessary to protect the security and quality of supply and safe operation of the Licensee's Transmission System under both normal and abnormal operating conditions;
a planning code specifying the technical and design criteria and procedures to be applied by the Licensee in the planning and development of the Licensee's Transmission system;
a scheduling and despatch code specifying the system for the scheduling and despatch of generating units;
procedures relating to the co-ordination of outages for scheduled maintenance of Generating Sets and transmission and distribution circuits; and
a metering code setting out requirements and procedures for metering;
a protection code setting out the requirements and coordination of protections systems.

17.7. The Licensee shall make available a copy of the Grid Code in force at the relevant time to any person requesting it, at a reasonable price.
17.8. In preparing, implementing and complying with the Grid Code (including in respect of the scheduling of maintenance of the Licensee's Transmission System), the Licensee shall not unduly discriminate against or unduly prefer:

any one or any group of persons or
the licensee in the conduct of any business other than the Transmission on Business

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.

19. Central Scheduling and Despatch:
19.1. Having regard to information provided to it by Electricity Operators, central generating stations and other utilities in the region (including information as to forecast levels of electricity demand and availability of generation capacity) and to the requirements of the Planning and Security Standards and the Operating Standards referred to in this licence the Licensee shall undertake operational planning:

for the matching to the extent possible of output of all Generating Sets contracted to it and any other Bulk Supplier and other sources of supply connected to the Licensee's Transmission System (including a reserve of generation to provide a security margin of generation availability) with forecast demand after taking into account, inter alia:
1. unavailability of Generating Sets, and
2. constraints from time to time imposed by technical limitations on the Total System or interconnections with other Transmission Systems or any part thereof;
consistently with sub-paragraph (a) and in accordance with the Grid Code, for the removal from service of parts of the Licensee's Transmission system for maintenance repair, extension or reinforcement.

19.2. Taking account of the factors referred to in Paragraph 19.3, the Licensee shall schedule and issue direct instructions for the despatch of such Generating Stations/Generating Sets and other sources of power as are at such times available to generate electricity and which are subject to despatch instructions:

in ascending order of relevant prices that are offered for the generation of electricity into the Total System, keeping in view the constraints on hydro-electric generation, and
as will in aggregate (and after taking account of electricity delivered to or from the Total System from or to other sources) be sufficient to match at all times (to the extent possible having regard to the availability of Generating Sets) expected demand, taking account of information provided by Electricity Operators together with an appropriate margin of reserve.

19.3. The factors referred to in Paragraph 19 2 include

expected demand (including transmission losses);
economic and technical constraints from time to time Imposed on the Total system or any part or parts thereof;
the dynamic operating characteristics of available Generating Sets; and
other matters provided for in the Grid Code.

19.4. The Licensee shall provide to the Commission such information as the Commission shall request concerning the merit order despatch described in Paragraph 19.2(a) or any aspect of its operation.

19.5. In this Condition 19:

"available"	means the state of a Generating Set such that it can respond successfully to a call to service by the entity with authority to despatch the system, and "availability" shall be construed accordingly.
"central despatch"	means the process of scheduling and issuing direct instructions by the Licensee as referred to in Paragraph 19.2.

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:

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

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;

ensure a satisfactory degree of standardization of plant apparatus and equipment within the State of Odisha, and
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:

forecast the demand for power within the Area of supply in each of the next succeeding 10 years; and
prepare and submit to the Commission for approval such long term (10 years) demand for power or load forecasts for the power system in Odisha. 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:

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.
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.

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;
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:

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

that it approves the submission; or
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:

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
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:

revenue realisations;
prosecution for theft;
deterring tampering with meters; and
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:

to accept into the Licensee's Transmission System electricity provided by another Bulk supplier pursuant to arrangements authorised by the Commission;
to deliver such quantities as adjusted for losses of electricity to an Electricity Operator who is Authorised to Supply electricity;
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:

the carrying out of works necessary to make the required connection, including the installation of meters;
the carrying out of any necessary` works to reinforce the Licensee's Transmission System
the connection charges to be paid in accordance with Condition 21; and
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:

to do so is likely to involve the Licensee:
1. in breach of any rules or Regulations relating to safety or standards applicable to the Transmission Business including, the Indian Electricity Rules 1956; or
2. in breach of the Grid Code; or
3. in breach of any of the Conditions of this license or,
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
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:

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
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 Odisha excluding cantonment, aerodrome, fortress, arsenal, dockyard or camp or any building or place in occupation of the Central Government for defence purposes.

The Odisha Transmission & Bulk Supply Licence 1997 (No. 2/97)

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