A distribution licensee may, with prior intimation to the Appropriate Commission, engage in any other business for optimum utilisation of its assets:
Provided that a proportion of the revenues derived from such business shall, as may be specified by the State Commission, be utilised for reducing its charges for wheeling:
Provided further that the distribution licensee shall maintain separate accounts for each such business undertaking to ensure that distribution business neither subsidises in any way such business undertaking nor encumbers its distribution assets in any way to support such business.
Legal Commentary & Landmark Judgments: Section 51
Section 51 of the Electricity Act, 2003 permits a distribution licensee to engage in other businesses for the optimum utilization of its assets, subject to maintaining separate accounts and utilizing a proportion of resulting revenues to reduce wheeling charges.
In tariff determination petitions before State Regulatory Commissions, ensure ancillary business revenues (such as telecom fiber leasing) are separately accounted for and credited against the Aggregate Revenue Requirement (ARR) to avoid regulatory disallowances.