(1) The State Government may notify the Board or a Government company as the State Transmission Utility:
Provided that the State Transmission Utility shall not engage in the business of trading in electricity.
(2) The functions of the State Transmission Utility shall be—
(a) to undertake transmission of electricity through intra-State transmission system;
(b) to discharge all functions of planning and co-ordination relating to intra-State transmission system;
(c) to ensure development of an efficient, co-ordinated and economical system of intra-State transmission lines;
(d) to provide non-discriminatory open access to its transmission system for use by any licensee or generating company or consumer.
Legal Commentary & Landmark Judgments: Section 39
Section 39 of the Electricity Act establishes the State Transmission Utility (STU) and mandates the provision of non-discriminatory open access to the intra-state transmission network.
This statutory framework establishes clear operational guidelines, balancing legal compliance with procedural safeguards.
Section 39 prevents state transmission utilities from acting as barriers to competition. Even if the state distribution company is running at a financial loss, the STU is statutorily prohibited from denying open access transmission capacity to private generators or industrial consumers.