<p>The salient features of the Act are:</p>

<p>The Central Government to prepare a National Electricity Policy in consultation with State Governments. (Section 3).<br />
Thrust to complete the rural electrification and provide for management of rural distribution by Panchayats, Cooperative Societies, non-Government organizations, franchisees etc. (Sections 4, 5 and 6).<br />
Provision for license free generation and distribution in the rural areas. (Section 14).<br />
Generation, being de-licensed and captive generation being freely permitted, Hydro projects would, however, need clearance from the Central Electricity Authority. (Sections 7, 8, 9).<br />
Transmission Utility at the Central as well as State level, to be a Government company-with responsibility for planned and coordinated development of transmission network. (Sections 38, 39).<br />
Provision for private licensees in transmission and entry in distribution through an independent network, (Section 14).<br />
Open access in transmission from the outset, (Sections 38-40).<br />
Open access in distribution to be introduced in phases with surcharge for current level of cross subsidy to be gradually phased out along with cross subsidies and obligation to supply. SERCs to frame regulations within one year regarding phasing of open access. (Section 42).<br />
Distribution licensees would be free to undertake generation and generating companies would be free to take up distribution businesses. (Sections 7, 12).<br />
The State Electricity Regulatory Commission is a mandatory requirement. (Section 82) (xi) Provision for payment of subsidy through budget. (Section 65)</p>
