The regulation of inter-state transmission, including the transmission tariff of the utilities engaged in inter-state transfers of energy, is a primary role of the Commission under The Act. There are five Regional Grids operating in the South, West, North, East and North-East. Each of the regional grids is governed by a Regional Electricity Board which came into being through the resolution of the Government of India in 1964 with the intention of promoting integrated operations of the power systems. While the Regional Electricity Boards are advisory in function Regional Load Despatch Centers (RLDCs) established in each region by CEA in the 1970s are in operational control of the regional electricity grids. The REBs were given statutory status in 1991 through an amendment of The Electricity (Supply) Act, 1948 Over the period January, 1994 to January 1, 19996 the RLDCs which were originally part of he Central Electricity Authority (CEA) were transferred to POWERGRID Corporation of India. Through further amendments to the ES Act in 1998 the role of the RLDCs was clarified and they were designated as the apex body to ensure integrated operation of the power system in the concerned region. Simultaneously, the Regional Electricity Boards were able to facilitate the RLDC on matters concerning the smooth operation of the integrated grid and economy and efficiency in the operation of the power system through a unanimous decision of the REB. This amendment has further clarified the system of dispute resolution under which, subject to regulations made by the Commission, all disputes relating to directions given by the RLDCs, are referred to the Central Electricity Authority for decision. The fees to be charged by the RLDCs is also to be specified by the CERC.

Over time, the procedures to be adopted for planning and operation of the regional grids have been specified by the Central Electricity Authority, decisions of the REBs and operational practices of the RLDCs. While the system has functioned well with diversification of the nature of utilities connected to the system subsequent to restructuring of the State Electricity Boards and the incentives given to the private investment growth in the volume of inter-state energy sales, rapid increases in the demand for energy with significant regional variations there has been a felt need for a unified code laying down the rules, guidelines and standards to be followed by the various agencies and participants in the Indian Electricity Grid System. In pursuance of this objective the Commission set up a special working group under the Chairmanship of Shri D.P. Sinha, Member CERC with the express purpose of discussing with all stakeholders of the regional grids the modalities to be adopted for formulation of an Indian Electricity Grid Code. The working group submitted its report in the first week of February 1999 which was subsequently forwarded to assist them formulating a draft Grid Code.

In March 1999 the Commission issued directives to POWERGRID for preparation of the Indian Electricity Grid Code and organisational arrangements for the Central Transmission Utility. To view a copy of these directives is available at Schedule VII.

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