Section 39 — State Transmission Utility and functions.

39. State Transmission Utility and functions.–(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         
(1 of 1956) to 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 centers; 

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

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

                                                             
1. The words “and eliminated” omitted by Act 26 of 2007, s. 4 (w.e.f. 15-6-2007). 
2. The third proviso omitted by s. 4, ibid. (w.e.f. 15-6-2007). 



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(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 1*** 
in the manner as may be specified by the State Commission: 

2*   *   *   *  * 

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.