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Section 39. (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:

Provided further that the State Government may transfer, and vest any
property, interest in property, rights and liabilities connected with, and personnel
involved in transmission of electricity, of such State Transmission Utility, to a
company or companies to be incorporated under the Companies Act, 1956 to
function as transmission licensee through a transfer scheme to be effected in the




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Duties of
Transmission
licensees

function as transmission licensee through a transfer scheme to be effected in the
manner specified under Part XIII and such company or companies shall be deemed
to be transmission licensees under this Act.

(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 with -

(i) Central Transmission Utility;

(ii) State Governments;

(iii) generating companies;

(iv) Regional Power Committees;

(v) Authority;

(vi) licensees;

(vii) any other person notified by the State Government in this
behalf;

(c) to ensure development of an efficient, co-
ordinated and
economical system of intra-State transmission lines for smooth flow of electricity
from a generating station to the load centres;

(d) to provid non-discriminatory open access to its transmission
system for use by-

(i) any licensee or generating company on payment of the
transmission charges ; or

(ii) any consumer as and when such open access is provided by the
State Commission under sub-section (2) of section 42, on payment of the
transmission charges and a surcharge thereon, as may be specified by the State
Commission:

Provided that such surcharge shall be utilised for the purpose of meeting
the requirement of current level cross-subsidy:

Provided further that such surcharge and cross subsidies shall be
progressively reduced and eliminated in the manner as may be specified by the
State Commission:

Provided also that such surcharge may be levied till such time the cross
subsidies are not eliminated:

Provided also that the manner of payment and utilisation of the
surcharge shall be specified by the State Commission.

Provided also that such surcharge shall not be leviable in case open
access is provided to a person who has established a captive generating plant for
carrying the electricity to the destination of his own use.