(1) The State Commission shall discharge the following functions, namely:—
(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:
Provided that where open access has been permitted to a consumer under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any;
(b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;
(c) facilitate intra-State transmission and wheeling of electricity;
(d) issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State;
(e) promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;
(f) adjudicate upon the disputes between the licensees, and generating companies and to refer any dispute for arbitration;
(g) levy fee for the purposes of this Act;
(h) specify State Grid Code consistent with the Grid Code specified under clause (h) of sub-section (1) of section 79;
(i) specify or enforce standards with respect to quality, continuity and reliability of service by licensees;
(j) fix the trading margin in the intra-State trading of electricity, if considered, necessary;
(k) discharge such other functions as may be assigned to it under this Act.
Legal Commentary & Landmark Judgments: Section 86
Section 86 of the Electricity Act, 2003 defines the statutory functions of the State Commission, vesting it with exclusive jurisdiction to determine intra-state tariffs, regulate power procurement, promote renewables, and adjudicate disputes between licensees and generating companies.
In contract disputes between a power generator and a distribution licensee, do not invoke the contractual arbitration clause under the Arbitration and Conciliation Act. File a dispute petition exclusively under Section 86(1)(f) before the State Commission citing Essar Power.