Electricity Act, 2001

Link to law: http://www.nationalcouncil.bt/assets/uploads/docs/acts/2014/Electricity_act_2001_Eng.pdf

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ELECTRICITY ACT

OF

BHUTAN

YEAR 2001

II

TABLE OF CONTENTS
Preamble....................................................................................................................................................... 1
PART 1………………………………………………………………………………………………….…...2
PRELIMINARY ............................................................................................................................................. 2
1 Title ........................................................................................................................................................ 2
2 Purpose ................................................................................................................................................. 2
3 Objectives ............................................................................................................................................. 2
4 Commencement................................................................................................................................... 3
5 Application ............................................................................................................................................ 3
6 Definitions ............................................................................................................................................. 3
PART 2 .......................................................................................................................................................... 7
BHUTAN ELECTRICITY AUTHORITY..................................................................................................... 7
7 Establishment of the Bhutan Electricity Authority ........................................................................... 7
8 Authority ................................................................................................................................................ 7
9 Secretariat............................................................................................................................................. 9
10 Meeting, quorum and decisions of the Authority ....................................................................... 10
11 Functions of the Authority ............................................................................................................. 13
12 Code of conduct ............................................................................................................................. 16
13 Finance............................................................................................................................................ 16
14 Tariff regulation .............................................................................................................................. 16
15 Advisory bodies .............................................................................................................................. 18
16 Separation of regulatory and operational activities................................................................... 19
17 Powers and function of the Minister ............................................................................................ 19
PART 3 ........................................................................................................................................................ 21
LICENCES .................................................................................................................................................. 21
18 Duty to obtain a licence................................................................................................................. 21
19 Exemptions ..................................................................................................................................... 21
20 Notice of intended application ...................................................................................................... 21
21 Permit to survey ............................................................................................................................. 22
22 Application for licence ................................................................................................................... 22
23 Advertisement of applications ...................................................................................................... 24
24 Objection to grant of a licence ..................................................................................................... 25
25 Factors to be considered for an application ............................................................................... 25
26 Statement of reasons for a decision ........................................................................................... 27
27 Other Licences ............................................................................................................................... 27
28 Authority may order compliance .................................................................................................. 27
29 Modification of a licence................................................................................................................ 29
30 Licensee’s application for modification ....................................................................................... 30
31 Duration of a licence...................................................................................................................... 32
32 Transfer of a licence ...................................................................................................................... 32
33 Performance of activities .............................................................................................................. 33
34 Licence conditions ......................................................................................................................... 33
35 Records and reports ...................................................................................................................... 35
36 Removal of installations ................................................................................................................ 36
37 Reversion of hydropower plants .................................................................................................. 36
38 Transmission licence ..................................................................................................................... 37
39 System operator............................................................................................................................. 38
40 Bulk supplier ................................................................................................................................... 39
41 Distribution licence......................................................................................................................... 39
42 Supply of electricity........................................................................................................................ 40
43 Rights and duties of customer ..................................................................................................... 41
44 Licensee’s fees............................................................................................................................... 43
45 Security............................................................................................................................................ 43
46 Reduction of supply ....................................................................................................................... 43
47 Disconnection of supply ................................................................................................................ 44

III

PART 4 ........................................................................................................................................................ 46
PRIVATE PARTICIPATION ..................................................................................................................... 46
48 Private participants ........................................................................................................................ 46
49 Principles governing the participation of private parties........................................................... 46
PART 5 ........................................................................................................................................................ 48
POWER TO ACQUIRE LAND AND WATER ........................................................................................ 48
51 Rights to acquire land.................................................................................................................... 48
52 Right over public, private and government land and premises ............................................... 49
53 Water rights..................................................................................................................................... 52
PART 6 ........................................................................................................................................................ 55
CONTINGENCY PROVISIONS............................................................................................................... 55
54 Application of contingency provisions ......................................................................................... 55
55 Compliance with contingency provisions.................................................................................... 58
57 Delegation by Minister................................................................................................................... 62
58 Judicial notice ................................................................................................................................. 63
59 Immunity from suit ......................................................................................................................... 63
SOCIAL OBLIGATIONS ........................................................................................................................... 64
60 Prescription of levies and issuance of directions ...................................................................... 64
61 Rural electrification ........................................................................................................................ 65
PART 8 ........................................................................................................................................................ 66
TECHNICAL REQUIREMENTS AND SAFETY .................................................................................... 66
PART 9 ........................................................................................................................................................ 68
PART 10...................................................................................................................................................... 71
MISCELLANEOUS .................................................................................................................................... 71

IV

1

THE ELECTRICITY ACT OF BHUTAN, 2001.

Preamble

The Electricity Act enables the restructuring of the power supply industry

and the possible participation of the private sector, by providing mechanisms

for licensing and regulating the operations of power companies. The

establishment of the Bhutan Electricity Authority as an autonomous body

will ensure a transparent regulatory regime; the Authority also has the role

of laying down the standards, codes, and specifications of the Electricity

Supply Industry. By this means the Electricity Act will define the roles and

responsibilities of suppliers and protect the interests of the general public.

Now, therefore, be it enacted by the National Assembly of Bhutan as

follows:

2

PART 1

PRELIMINARY

1 Title

1.1 This Act shall be cited as the Electricity Act of Bhutan,

2001.

2 Purpose

2.1 The purpose of this Act is to provide for:

i) the restructuring of the electricity supply industry;

ii) the establishment of the Bhutan Electricity Authority;

iii) the technical regulation of the electricity supply

industry;

iv) the private sector participation in the electricity

supply industry; and

v) to empower the Government to participate in the

formation of any company for the purpose of

carrying out all or any of the purpose of the Act.

3 Objectives

3.1 The objectives of this Act include, but are not limited to

the following:

i) to promote a safe and reliable supply of electricity

throughout the country;

ii) to enhance revenue generation through export of

3

electricity;

iii) to develop the socio-economic welfare of the

people;

iv) to promote economic self reliance of the country

through the development of a financially viable and

reliable electricity industry;

v) to promote development of renewable energy

resources;

vi) to take environmental considerations into account

when developing the electricity supply industry; and

vii) to promote efficiency in management and service

delivery.

4 Commencement

4.1 This Act shall come into force from such date as the

Minister may appoint by notification in a National

Newspaper.

5 Application

5.1 This Act shall extend to the whole of the Kingdom.

6 Definitions

In this Act unless a contrary intention appears:

4

6.1 a reference to a Part, Section, or Subsection is a

reference to a Part, Section, or Subsection in this Act;

6.2 meanings to words are as follows:

i) "Bhutan Electricity Authority" or "Authority"
means the authority of that name established

pursuant to Part 2;

ii) "corporation" has the same meaning as "body
corporate" defined in the Companies Act of the

Kingdom of Bhutan, 2000;

iii) “distribution" means the conveyance of electricity
through a distribution system and which distributes

electricity at voltages below 66 kilovolt or as is

deemed by the Authority to be a part of the

distribution network;

iv) "distribution system" means a network which is
not a transmission system, together with the

connection assets association with the network,

which is connected to another transmission or

distribution system;

v) "generation" means the conversion of another form
of energy into electricity;

vi) "generation facilities" means the generating plant
and all related equipment essential to the

generation of electricity;

vii) "Government" means the Royal Government;
viii) "levy" means an amount to be paid by any person

5

in respect of electricity supply or usage pursuant to

Part 7;

ix) “licence” means a licence issued under the
provisions of Part 3;

x) "Licensee" means any person issued with a licence
pursuant to Part 3;

xi) "Minister" means the Minister who is the Head of
the Ministry;

xii) "Ministry" means the Ministry, which is assigned
the responsibility of the electricity sector;

xiii) "network" means apparatus, equipment, plant and
infrastructures used to convey and control the

conveyance of electricity to customers;

xiv) "person" includes any individual, firm, company,
association, partnership or body of persons,

whether incorporated or not;

xv) "power supply" means the supply of electricity by
way of the power system in accordance with system

security;

xvi) "power system" means the total system relating to
power supply including associated generation,

transmission and distribution network;

xvii) "private participant" means any person from the
private sector in electricity business either for bulk

supply or retail sale under certain conditions;

xviii) "sale" means the sale of electricity to a customer or
for resale to third parties;

6

xix) "supply" means the generation, transmission or
distribution of electricity by way of the generation,

transmission or distribution system, respectively;

xx) "system security" means the operation and control
of the power system to maintain a safe and reliable

supply of electricity;

xxi) "transmission" means activities pertaining to a
transmission system including the conveyance of

electricity at voltages above 66 kilovolt or as is

deemed by the Authority to be a part of the

transmission network; and

xxii) "transmission System" means a network
operating at nominal voltages of 66 kilovolt and

above or as is deemed by the Authority to be a part

of the transmission network.

6.3 Words importing the masculine gender also include the

feminine gender.

6.4 Words importing the singular number also include the

plural number and vice versa.

7

PART 2

BHUTAN ELECTRICITY AUTHORITY

7 Establishment of the Bhutan Electricity Authority

7.1 There is hereby established the Bhutan Electricity

Authority.

7.2 The Authority:

i) is a body corporate with perpetual succession;

ii) shall have an official seal and such seal may be

changed, altered and made anew as the Board

deems fit;

iii) may sue and be sued in its own name;

iv) may acquire, hold and dispose of real and personal

property; and

v) may do and suffer all acts and things that a body

corporate may do and suffer by law.

7.3 The Authority shall have the functions and duties, which

are conferred and imposed on it by virtue of this Act.

8 Authority

8.1 The Authority shall consist of:

i) a Chairman;

8

ii) not less than three members; and

iii) a Chief Executive Officer of the Authority

all of whom shall be appointed by the Minister on such

terms and conditions as he may determine for a period

not exceeding five years.

8.2 No member of the Authority appointed by the Minister

shall be eligible to serve more than two consecutive terms

as chairperson or ordinary member of the Authority;

8.3 The Minister may appoint any member of the Authority to

be the Deputy Chairman of the Authority, and if for any

reason the Chairman is unable to act, or the office of

Chairman is vacant, the deputy Chairman may exercise

all or any of the functions conferred, or the duties

imposed, on the Chairman.

8.4 The Minister may appoint any person to be a temporary

member of the Authority during the incapacity owing to

illness or otherwise of any member of the Authority.

8.5 Where it appears to the Minister to be necessary in the

interests of the efficient performance of the functions and

duties of the Authority, he may revoke any appointment.

8.6 A member of the Authority may resign his seat at any time

9

by giving one month's notice in writing to the Minister.

8.7 The seat of a member shall become vacant.

i) on his death;

ii) if he, without sufficient cause, which is to be

decided by the Authority, fails to attend three

consecutive meetings of the Authority;

iii) if he becomes in any manner disqualified for

membership of the Authority, including if he

breaches the code of conduct;

iv) if he is an undischarged insolvent; or

v) if he resigns his seat.

8.8 If a vacancy occurs in the membership of the Authority,

the Minster may appoint a person to fill the vacancy, and

any person so appointed shall hold office for so long as

the member in whose place he is appointed would have

held office.

9 Secretariat

9.1 The Authority shall have a secretariat headed by a Chief

Executive Officer.

9.2 The Chief Executive Officer shall:

i) be ex-officio secretary of the Authority;

10

ii) carry out such functions as the Authority or the

Chairman may assign to him;

iii) record and keep the minutes of all proceedings of

the Authority and other records of the Authority;

iv) have custody of the seal of the Authority; and

v) in the performance of his duties, be responsible to

the Chairman.

9.3 The Chief Executive Officer may appoint staff as he may

think fit, subject to the approval of the Authority as to the

numbers and terms and conditions of service.

10 Meeting, quorum and decisions of the Authority

10.1 The Authority shall meet for the discharge of business at

least four times in a year or upon a request in writing to

the members by the Chairman.

10.2 The Authority shall meet at such time and place as the

Chairman may appoint.

10.3 The Chairman may also call a special meeting of the

Authority.

10.4 A meeting of the Authority shall be convened by a notice

to each member issued and signed by the Secretary at

least fourteen days before the meeting, except that a

11

shorter notice may be given for a special meeting.

10.5 The quorum at a meeting of the Authority shall be a

simple majority.

10.6 The decisions of the Authority shall be made by a majority

vote of the members present and voting.

10.7 Each member shall have one vote, and the Chairman

shall have a casting vote in the event of a tie.

10.8 The Secretary shall cause to be recorded and kept,

minutes of all meetings of the Authority in a form

approved by the Authority.

10.9 The minutes recorded under subsection 10.8 shall be

submitted to the Authority for confirmation to which the

minutes relate and when so confirmed, shall be signed by

the Chairman and the Secretary.

10.10 Subject to subsection 10.11, a decision of the Authority

may be made by circulation of the relevant papers among

members of the Authority and the expression of their

views in writing; except that any member is entitled to

require that the decision be deferred until the subject-

matter has been considered at a meeting of the Authority.

12

10.11 A decision made by circulation of papers under

subsection 10.10 is not valid unless it is supported by

majority members of the Authority.

10.12 The validity of any proceeding of the Authority shall not be

affected by any vacancy among its members or by any

defect in the appointment of any of them.

10.13 A member of the Authority who is in any way directly or

indirectly interested in a matter being considered at a

meeting of the Authority or in which his spouse is

interested in a private capacity, shall, as soon as

practicable after the commencement of the meeting

disclose the nature of his interest to the meeting.

10.14 A member making a disclosure under subsection 10.13

shall not take part in any consideration or discussion of,

or vote on any question relating to the matter.

10.15 A disclosure of interest made under subsection 10.14

shall be recorded in the minutes of the meeting at which it

is made.

10.16 A notice or other document may be served on the

Authority by delivering it to the office of the Secretary or

by sending it by prepaid registered post addressed to the

Secretary.

13

10.17 Except as otherwise provided under this Act, the Authority

may regulate its own procedure.

11 Functions of the Authority

11.1 Functions of the Authority are:

i) to develop regulations, standards, codes, principles

and procedures, which include, but are not limited to

the following;

a. performance standards, including minimum

technical and safety requirements for

construction, operation and maintenance of

generation, transmission and distribution

facilities;

b. tariff-setting, including tariffs for generation not

regulated by power purchase agreement,

transmission, distribution and retail sale.

These regulations should also comprise terms

and conditions for connection fees and

investment contribution from customers, and

for provision of access to the transmission grid

and distribution networks;

c. subsidies to entities carrying out non-

economic viable electricity supply based on

the policies and planning executed by the

14

Minister;

d. requirements for Licensees' reporting,

accounting and issuance of information to the

Authority;

e. system operation, including dispatch of

generation; and

f. levies, charges or royalties to be paid by

Licensees.

ii) to process applications and issue, modify and

revoke licences for generation, transmission,

system operation, export, import, distribution and

sale of electricity;

iii) to monitor the performance of Licensees and their

compliance with provision of this Act, regulations,

standards, codes, licences and contracts approved

by the Authority and concession agreements

entered into between the Minister and Licensees;

iv) to determine, or approve tariffs proposed by the

Licensees, and review existing tariffs;

v) to prescribe and collect fees, charges or royalties

from Licensees;

vi) to impose any fines, sanctions or penalties for any

breach of provisions of this Act, regulations,

standards, codes, licences or contracts to be

approved by the Authority, and concession

agreements entered into between Licensees and

15

the Government;

vii) to establish a dispute resolution process and settle

disputes between Licensees and between

Licensees and customers relating to the

enforcement of this Act, regulations, codes,

standards and licences issued under this Act,

contracts approved by the Authority and concession

agreements entered into between the Minister and

Licensees, or otherwise any other arrangement for

settlement of disputes which are not determined by

the mentioned legal instruments; and

viii) any other duties or responsibilities delegated by the

Minister.

11.2 The Authority shall, in the performance of his functions:

i) ensure the reliability, quality, security and efficiency

of electricity supply;

ii) encourage competition in electricity generation,

transmission and supply;

iii) ensure non-discriminatory access to the

transmission and distribution system;

iv) ensure a fair balance of the interests of the public,

customers and participants in the electricity sector;

v) facilitate the development of generation,

transmission and distribution of electricity

throughout the country; and

vi) ensure the protection of the natural resources, the

16

environment and other public interests affected by

the development of electricity supply.

12 Code of conduct

12.1 The Authority shall perform his functions in a manner that:

i) is transparent and objective;

ii) is fair, reasonable and efficient;

iii) is non-discriminatory; and

iv) promotes fair competition.

13 Finance

13.1 The activities of the Authority shall be funded from:

i) levies, fees and other charges payable to the

Authority in his performance of functions under this

Act, including but not limited to licence fees; and

ii) budgetary support from the Government.

14 Tariff regulation

14.1 The Authority may regulate:

i) tariffs for the sale of electricity to customers by

Licensees;

ii) charges for connection to, and the use of any

distribution system;

iii) charges for connection to, and the use of any

transmission system;

17

iv) tariffs for generation not regulated by power

purchase agreement; and

v) other such prices and charges in respect of goods

and services provided by Licensees.

in accordance with the following principles:

a. fairness to both service customers and service

providers;

b. there shall be no unjust discrimination against

service customers or those who wish to use

the services;

c. the tariffs should reflect the actual cost of

efficient business operation;

d. guidelines on the tariffs determination must be

conducive to efficiency improvement in the

business operation;

e. the tariffs should be at the levels enhancing

efficient and adequate energy supply to satisfy

the domestic demand;

f. there must be a public announcement and

dissemination of the accountable and

transparent tariffs; and

g. the calculation from which the tariffs are

derived must be explicit and made publicly

available, promptly upon any determination

thereof by the Authority.

18

14.2 The manner of such price regulation by the Authority may

include:

i) fixing the price or the rate of increase or decrease in

price for transmission, distribution and retail

charges;

ii) fixing a maximum price or maximum rate of

increase or decrease in maximum price for

transmission, distribution and retail charges;

iii) fixing an average price for transmission, distribution

and retail charges;

iv) specifying the cost of production and a rate of return

on assets employed in production; and

v) fixing a maximum revenue for transmission,

distribution and generation companies.

15 Advisory bodies

15.1 The Authority may establish such advisory bodies as he

thinks fit consisting in each case of members as he may

from time to time appoint.

15.2 It shall be the duty of an advisory body, established under

subsection 15.1 to advise the Authority on any matter:

i) in respect of which any of the Authority's functions

are exercisable; and

ii) which is referred to it by the Authority,

19

each advisory body established pursuant to subsection

15.1 shall report as required to the Authority on the

activities, the advisory body has undertaken.

16 Separation of regulatory and operational activities

16.1 Regulation of the power sector shall be carried out

independently of the operation of the power sector and

the provision of services related to the power system and

power supply.

17 Powers and function of the Minister

17.1 The powers and function of the Minister under this Act

are:

i) to determine general policies, targets and strategies

of the electricity industry operation;

ii) to approve power system expansion plans;

iii) to set general policies on tariff determination and

service provision of Licensee;

iv) to provide the policy on customer service standards

and Licensee standards;

v) to set the policy encouraging energy service

extensions and providing electricity services for the

underprivileged;

vi) to approve the licence fee and the fee for the

Licensee;

20

vii) to approve the operational plan and the budget of

the Authority;

viii) to provide the policy on the protection against and

solution to energy shortage;

ix) to approve the rules and codes of conduct of the

Authority;

x) to provide policy in respect of private participation;

xi) to grant Licensees permissions for compulsory

acquisition of ownership or rights to land and water

necessary for implementation and operation of

licensed activities; and

xii) to perform other duties as stipulated under this Act.

21

PART 3

LICENCES

18 Duty to obtain a licence

18.1 No person or entity shall engage in, construction,

generation, transmission, system operation, distribution,

sale, export or import of electricity without a licence

issued under this Act.

19 Exemptions

19.1 The Authority may exempt any person from the

requirement to obtain a licence under section 18 where

such exemption may include, but is not limited to, the

generation of electricity below 500 kilowatt.

19.2 An exemption may be of general or specific application.

19.3 An exemption is subject to such terms, conditions and

limitations as are specified by the Authority.

20 Notice of intended application

20.1 A person or entity that intends to establish a project or

operation for which a licence is required under this Act

22

shall notify the Authority of the intended project or

operation.

20.2 Notice given under subsection 20.1, shall as far as

possible contain the same information as described under

section 22 relating to applications, which is available at

the time of issuance of the notice.

21 Permit to survey

21.1 Based on a notice received, the Authority may issue a

permit allowing the intended applicant to carry out

assessments, studies and any other activity that may be

necessary to enable the intended applicant to prepare an

application for a licence.

22 Application for licence

22.1 A corporation may apply to the Authority for the issue of a

licence authorizing one or more of the following activities

as are specified in the licence:

i) to generate electricity;

ii) to transmit electricity;

iii) to bulk supply;

iv) to distribute electricity;

v) to supply electricity;

vi) to trade in electricity; and

23

vii) to acquire a licence from another party.

22.2 An application for a licence must be submitted to the

Authority in the prescribed form supplied by the Authority

and accompanied by the following documents:

i) the legal and financial status of the applicant;

ii) a technical and economic description of the project;

iii) a description of how the project fits in with the

existing and planned electricity supply system;

iv) the planned time of commencement and completion

of the construction of the project;

v) a view of the project's adaptation to the landscape,

including necessary maps and drawing;

vi) the impact of the project on public interests and

possible mitigation;

vii) a summary and conclusions of assessments and

studies, including environmental impact

assessment;

viii) impacts of the project on private interests, including

the interest of affected landowners and holders of

other rights;

ix) proposed tariff calculation;

x) consents and permit required under any other law;

and

xi) any other documents required by the Authority.

24

22.3 An application shall be accompanied by the complete

prepared reports relating to the assessments and studies

carried out.

22.4 The Authority may specify the requirements of an

application described under subsection 22.1, 22.2 and

22.3 according to the type and extent of impacts of the

project or operation applied for.

22.5 An application shall be accompanied by the prescribed

application fee as publicly announced by the Authority

from time to time.

22.6 The Authority shall as soon as possible after receipt of an

application either request additional information or confirm

in writing to the applicant, that the application is complete

in all aspects.

23 Advertisement of applications

23.1 The Authority shall, within a reasonable time after

confirming that the application is complete in all aspects

cause a notice of the application to be published in at

least one national newspaper of wide circulation.

23.2 A notice published under subsection 23.1 shall:

i) indicate the receipt of an application for a licence;

25

ii) contain a description of the nature and location of

the project applied for;

iii) inform the members of the public that the

application may, within the limits of commercial

confidentiality, be inspected at the office of the

Authority or at a public office in the area where the

project applied for is supposed to be located; and

iv) invite directly affected parties and local authorities in

areas affected by the project who object to granting

of the licence, whether on personal, environmental

or other grounds, to lodge with the Authority an

objection within a specified time, being not less than

thirty days from the date of the notice.

24 Objection to grant of a licence

24.1 An affected party may lodge with the Authority an

objection to the grant of a licence, setting out the grounds

of the objection.

25 Factors to be considered for an application

25.1 When granting or rejecting applications, the Authority

shall take into consideration, as far as adequate for the

project applied for:

i) the needs for electricity, or revenues for export of

electricity, of the country, region or community;

26

ii) the impact of the operation of the undertaking on

the social, cultural and recreational life of the

community;

iii) the needs to protect the environment and to

conserve the natural resources;

iv) land use and siting or route of the project;

v) the costs of the project;

vi) the ability of the applicant to operate in a manner

designed to protect the health and safety of users of

the service for which the licence is required and

other members of the public who would be affected

by the operations of the applicant;

vii) the technical, economic and financial capacity of the

applicant to render the service for which the licence

is required;

viii) energy efficiency;

ix) any representations and objections made under

section 24;

x) the price or tariff offered; and

xi) other public and private interests affected by the

operation for which the licence is required.

25.2 Notwithstanding subsection 25.1 the Authority shall when

granting or rejecting an application, take into

consideration the policies of the Government and any

other matter that may be considered likely to have a

bearing on the operations of the applicant.

27

26 Statement of reasons for a decision

26.1 The Authority shall after having decided whether to grant

or reject an application for a licence, produce a statement

of reasons within thirty days after making the decision.

26.2 The statement shall be issued to the applicant, and it shall

be made available to interested parties on request.

27 Other Licences

27.1 Nothing in this Act shall prevent the holder of a licence

who has fulfilled all the necessary obligations, from

applying for and obtaining any other licence under this

Act. The Authority shall take into consideration whether

the grant of an additional licence will promote efficiency

and fair competition in its review of the application.

28 Authority may order compliance

28.1 Where the Authority is of the opinion that a Licensee is in

contravention of a condition of a licence or a requirement

under this Act, or regulations, codes or standards made

under this Act, it shall direct the Licensee to comply with

that condition or requirement.

28

28.2 A notice containing the direction to comply under

subsection 28.1 shall be sent to the Licensee at his

registered address and other directly affected parties and

shall:

i) contain the relevant licence condition or

requirement of legislation to which the breach is

related;

ii) contain the acts, omissions or other facts that

which, in the opinion of the Authority, constitute a

contravention of the condition or requirement;

iii) specify a reasonable period within which the

Licensee must rectify the breach or contravention;

and

iv) specify the period, not being less than twenty days

from the date of receiving this notice, within which

representations or objections may be made by the

Licensee or directly affected parties.

28.3 All representations and objections received shall be

considered before the Authority notifies the Licensee and

the directly affected parties of its decision.

28.4 Where the Authority, following consultation with the

relevant Licensee and directly affected parties, is satisfied

that the Licensee is contravening or likely to contravene a

condition of a licence or any requirement under this Act,

regulations, codes or standards made under this Act, and

29

where the Authority is satisfied that immediate action is

necessary:

i) to protect public health, safety, the environment; or

ii) to prevent the dissipation of property or assets,

it may direct the Licensee to take immediate action to

discontinue or refrain from the practice.

28.5 Where the Licensee does not take action under

subsection 28.4, the Authority may take action on behalf

of the Licensee at the costs of the Licensee.

29 Modification of a licence

29.1 The Authority, may modify the terms and conditions of a

licence:

i) in accordance with the procedures specified in the

licence conditions;

ii) by agreement between the Authority and the

Licensee; or

iii) in accordance with the conditions of subsection 29.2

the procedures described in subsection 29.3.

29.2 The Authority may only modify the terms and conditions

of a licence if the benefits of such modification for public

interests significantly exceed the disadvantages of the

Licensee.

30

29.3 The Authority shall before making modifications under

subsection 29.2, give notice to the Licensee and other

directly affected parties:

i) stating that it intends to make modifications and

setting out their effect;

ii) stating the reasons for the modifications and why it

is of the opinion that the grounds for modifications

under subsection 29.2 are fulfilled; and

iii) specifying the period within which representations

or objections with respect to the intended

modifications may be made and such period shall

not be less than thirty days from the date of issue of

notice.

29.4 The Authority shall take into account all representations

and objections before notifying the Licensee and other

directly affected parties of his decision.

29.5 The Licensee shall be compensated for financial losses

as a result of modifications as laid down in the licence

conditions.

30 Licensee’s application for modification

30.1 Where, in the opinion of a Licensee, conditions of his

licence have become unduly onerous and are impacting

31

on his ability to fulfil his obligations under the licence, he

may apply to the Authority in writing requesting that the

licence be modified, setting out:

i) the conditions of the licence which he request to be

modified;

ii) the reason why these conditions have become

unduly onerous;

iii) the proposed modifications; and

iv) any other evidence in support of the application.

30.2 The Authority shall submit a notice to parties affected by

the modification enclosing a copy of the Licensee's

application under subsection 30.1, specifying the period

within which representations or objections with respect to

the intended modifications may be made and such period

shall not be less than thirty days from the date of issue of

notice.

30.3 If the requested modifications are to the disadvantage of

public or other affected privates interest, the Authority

may not modify a licence under this section, unless such

modification is in the overall national interest.

30.4 The Authority shall take all representations and objections

into account before notifying the Licensee and the

affected parties of his decision.

32

31 Duration of a licence

31.1 Subject to any current provision of this Act, a licence shall

remain in force for the period specified in it, but shall not

in any case exceed thirty years.

31.2 A Licensee may within three years before the expiry of a

licence, apply for a renewal of the licence.

31.3 A licence may be renewed on such terms and conditions

as determined by the Authority.

32 Transfer of a licence

32.1 A licence shall not be transferred without the written

consent of the Authority.

32.2 A Licensee may apply to the Authority for the transfer of a

licence.

32.3 An application under subsection 32.2 shall be

accompanied by the application by the person to whom

the Licensee intends to transfer the licence, and the

prescribed transfer fee shall be paid as determined by the

Authority.

33

32.4 The Authority shall satisfy itself of the legal, technical and

financial competence of the transferee.

32.5 In this section “transfer of a licence” includes the

acquisition of control by the licence holder, and “control”

as used with respect to any person, means the

possession, directly or indirectly, of the power to direct or

cause the direction of management of that person,

whether through the ownership of shares, voting,

securities, partnership or other ownership interests,

agreements or otherwise. The Authority shall not

unreasonably withhold the consent to any application to

transfer unless it has reason to believe that the public

interest is likely to be prejudiced by the transfer.

33 Performance of activities

33.1 A Licensee shall carry out the licensed activities in

accordance with the licence, this Act and regulations,

standards and codes.

34 Licence conditions

34.1 The Authority may impose licence conditions relevant for

the current activities not conflicting with this Act, or

regulations, standards and codes.

34

34.2 The Authority may revoke a licence where he is satisfied

that the Licensee is not operating in accordance with the

terms and conditions of the licence or provisions of this

Act or any regulations, codes or standards made under

this Act if the breach;

i) inflicts significant damage on public or private

interest affected by the breach;

ii) lasts for a considerable period of time;

iii) takes place repeatedly; or

iv) causes the Authority to have strong reasons to

believe that the Licensee may not be able to fulfill

his or her obligations under the licence or this Act.

34.3 The Authority shall give Licensee forty five days notice to

show cause why the licence should not be revoked.

34.4 A notice under subsection 34.3 shall set out;

i) the relevant condition of the licence or the

requirement of legislation to which the breach is

related;

ii) the acts, omissions or other facts which, in the

Authority’s opinion constitute a contravention of the

condition or legislation, and the reasons why the

Authority is of the opinion that any of the

circumstances mentioned under subsection 34.2;

and

35

iii) the period not being less than twenty eight days

from the date of issuing of the notice within which

representations or objections may be made by the

Licensee.

34.5 A decision made by the Authority to revoke licence after

considering all representations and objections received

under this Act and other relevant factors may be appealed

by the holder of the revoked licence to the Court of Law

within thirty days after receipt of the decisions of the

Authority.

34.6 Where a licence is revoked, the Authority shall take such

action as is necessary to ensure that the supply of service

to consumers is not unduly interrupted as a result of

revocation.

35 Records and reports

35.1 A Licensee shall keep records and prepare reports

relating to the Licensee’s operations.

35.2 The Authority shall make regulations specifying the

requirements for records and reports required under

subsection 35.1.

36

35.3 A Licensee shall, at the request of the Authority and at the

cost of the Licensee, provide all relevant available

information about the technical, financial, hydrological or

environmental issues and any other relevant information

relating to the operations of the Licensee. The Authority

shall make such request only as are required to perform

his functions under the Act.

35.4 A Licensee shall keep accounts according to regulations

of the Authority.

35.5 The Authority shall require Licensees undertaking more

than one licensed operation to keep separate accounts

for each operation.

36 Removal of installations

36.1 The Licensee shall, on the expiry of the licence, remove

on his expense and to the satisfaction of the Authority, all

installations considered by the Authority as inappropriate

for further operation based on the objectives of the

Authority.

37 Reversion of hydropower plants

37.1 On the expiry of a licence for a hydropower plant, the

ownership of the plant including all existing installations,

37

property and rights needed for power generation shall be

transferred to the Government without any compensation

to the Licensee.

37.2 The power plant and installations transferred under

subsection 37.1 shall be operational and well maintained

at the time of transfer.

37.3 After transfer of ownership under subsection 37.1, the

power plant, including all installations, property and rights

required for power generation shall be dealt with by the

Government in any manner it deems appropriate.

38 Transmission licence

38.1 A holder of a transmission licence shall provide access to

all existing and potential users of the transmission grid on

the payment of fees and other charges for grid services

as may be approved by the Authority.

38.2 Transmission Licensee shall provide the Authority with

such information as the Authority may prescribe to enable

the Authority to approve the fees and charges under

subsection 38.1

38

39 System operator

39.1 The Authority may designate a person to be a system

operator, and licence the person:

i) to co-ordinate the power supply system to obtain

instantaneous balance between generation and

consumption of electricity;

ii) to be responsible for dispatching generation

installations;

iii) to co-ordinate transmission outages;

iv) to monitor the import and export of electricity;

v) to prepare forecasts of generation requirements;

vi) to prepare regulations, with the approval of the

Authority, for the dispatch of generation

installations; and

vii) to perform such other functions as may be

prescribed by the Authority in the licence or by

regulations.

39.2 The system operator shall not, in the performance of its

functions, show undue preferences or discriminate

against any person.

39.3 The system operator may recover all reasonable costs

incurred in the performance of his functions.

39

39.4 All Licensees shall comply with the decisions of the

system operator in connection with the execution of his

functions under this Act or regulations.

40 Bulk supplier

40.1 The Authority shall designate a bulk supplier who will be

responsible for the wholesale supply, including import and

export, of electricity.

40.2 The terms and operating conditions of the bulk supplier

shall be specified in its sale licence or prescribed by

regulations.

41 Distribution licence

41.1 The area of the Licensee’s distribution of electricity shall

be defined in the licence.

41.2 A holder of a distribution licence shall provide access to

all existing and potential users of the distribution network

on the payment of tariffs, terms and conditions for

network services as may be approved by the Authority.

41.3 A Licensee shall provide the Authority with such

information as the Authority may prescribe to enable the

40

Authority to approve the tariffs, fees and charges under

subsection 41.2.

41.4 A Licensee shall give a notice specifying the tariffs, terms

and conditions for supply of electricity. The tariffs, terms

and conditions of which notice has been given by

distribution Licensee shall have affect as specified in the

notice which shall be announced through the national

newspaper shall be binding on the Licensee and the

customers to which they apply.

41.5 The quality of distribution services shall be in accordance

with standards prescribed by the Authority.

42 Supply of electricity

42.1 A Licensee shall, upon being required to do so by the

owner or occupier of any premises, supply electricity to

those premises, and as far as may be necessary for that

purpose, provide supply lines or any electrical installation

or equipment.

42.2 Where a person requires supply of electricity under

subsection 42.1, he shall give to the Licensee a notice

specifying his requirements of electricity supply.

41

42.3 Where a Licensee receives from any person a notice

under subsection 42.2 requiring the Licensee to supply

electricity to any premises, the Licensee shall as soon as

practicable after receiving the notice, give to that person a

notice specifying all terms and conditions relevant for the

electricity supply.

42.4 Where a Licensee defaults in supplying electricity to a

customer to whom the Licensee is required to supply, the

customer may appeal to the Authority. The Authority may

take such actions as are permitted under this Act or

prescribed by regulations.

43 Rights and duties of customer

43.1 A customer shall comply with safety regulations made by

the Authority.

43.2 A customer who fails to comply with regulation made

under subsection 43.1 commits an offence.

43.3 Where a Licensee defaults in supplying electricity to a

customer to whom the Licensee is required to give a

supply of electricity, the customer may appeal to the

Authority.

42

43.4 Notwithstanding subsection 43.3, a Licensee may

interrupt the supply of electricity to a customer for such

periods as may be necessary for carrying out inspections,

tests, repairs, alterations, reconstruction or making of new

connections, and the Licensee shall, except in the case of

emergency, give prior notice by advertisement in the

national newspaper or other media appropriate to reach

the customers or by writing a notice to a customer whose

supply it intends to interrupt and who may reasonably be

expected to require a supply during the period of

interruption.

43.5 Where damage or loss is caused to the customer by the

negligence of the Licensee in the course of its operations,

the customer is entitled to prompt payment of fair and

adequate compensation by the Licensee for damage or

loss sustained as a result of the course of its operations.

43.6 Compensation shall not be paid under subsection 43.5

unless a written claim for compensation has been lodged

with the Licensee within six months after either customer

learning of the act giving rise to claim, or the completion

of any works in respect of which compensation is sought

whichever is later.

43

43.7 A dispute as to the liability of the Licensee to pay

compensation under subsection 43.5 or the amount of

that compensation shall be determined by the Authority.

44 Licensee’s fees

44.1 Where a supply line or electrical installations or

equipment is provided to a customer by a Licensee, the

licensee may require the customer to pay connection fees

or other charges as an investment contribution as may be

approved by the Authority.

45 Security

45.1 A Licensee may require a person who requires supply of

electricity under section 42 to give the Licensee

reasonable security for all monies that become due to the

Licensee in respect of the electricity supply.

45.2 Where a person fails to give security required under

subsection 45.1, the Licensee may refuse to give the

supply or install required installations or equipment until

the security has been given.

46 Reduction of supply

46.1 A Licensee may without incurring any liability, for so

doing, reduce as he thinks fit the quantity of electricity

44

supplied, if at any time he is of the opinion that his supply

of electricity is insufficient for the purpose of normal

supply to his customers.

46.2 A Licensee may in cases of emergency, repairs to main

or in connection with construction of new works, alteration

to existing works or the installation, changing or removal

of meters, stop or redirect in part or whole, the electricity

under its control or management, notwithstanding any

agreement made with any person for the supply of

electricity.

47 Disconnection of supply

47.1 Where a customer fails to pay for the electricity supply in

due time, or fulfil other obligations towards the Licensee,

the Licensee may disconnect that customer according to

procedures prescribed by the Authority.

47.2 Where a customer is found indulging in unauthorized

tapping of electricity or supplying electricity shall without

prejudice to his other rights, cause the supply of electricity

to such customer to be disconnected without prior notice.

The customer however shall have the right to appeal such

action to the Authority.

45

47.3 The Licensee however shall notify the customer in writing

of his action under subsection 47.2.

46

PART 4

PRIVATE PARTICIPATION

48 Private participants

48.1 Private participants in the electricity supply industry must

be licensed as prescribed under Part 3.

49 Principles governing the participation of private parties

49.1 In the event, the Government decides for private

participation in the electricity industry, the Authority shall

prepare and promulgate regulations in relation to the

establishment, ownership, operations and activities of

private participants. These regulations and the

Government’s policy shall comply with the following

principles:

i) the energy policy of the Government shall be clear

and published;

ii) the regulations prepared and promulgated by the

Authority shall be clear, consistent and published;

iii) the regulations shall be consistently and

transparently applied;

iv) solicitation of, and bids for, construction of electricity

supply facilities by private parties are competitively

sourced and contested in accordance with a

47

published timetable and shall be reviewed

independently;

v) information shall be made available to bidders in

relation to preferred sites and technical parameters;

and

vi) clear mechanisms for currency convertibility and

remittances shall be prepared and published.

49.2 The bidding procedures shall be managed by the

Authority, which shall give his recommendations to the

Minister for final decision regarding the selection of the

successful bidder.

49.3 With respect to any unsolicited bids that the Authority may

receive, the Authority will deal with these in a manner

consistent, where relevant, with the principles set out in

subsection 49.1.

48

PART 5

POWER TO ACQUIRE LAND AND WATER

50 In this Part to the extent there is a conflict between this Act and
the Forest and Nature Conservation Act of Bhutan, the Forest

and Nature conservation Act prevails to the extent of the

inconsistency.

51 Rights to acquire land

51.1 Where any land under private ownership is required to be

acquired for setting up a project under licence pursuant to

Part 3, the land may be acquired under the prevailing

Land Act on approval of the Minister and such acquisition

shall be deemed for a public or national purpose.

51.2 Where the Minister is satisfied that the land under

subsection 51.1 is required for the purpose of providing or

maintaining electricity supply services to the public, and

that it is required in the public or national interest,

regardless of whether the Licensee is a public or private

entity, the Minister shall pursue the acquisition of the land

on behalf of the Licensee in accordance with the Land

Act.

49

51.3 A Licensee may submit an application to the Minister for

acquisition of any land required for a project.

51.4 A Licensee shall make all efforts to enter into voluntary

agreement with the affected landholder for purchase of

land prior to submitting an application to the Minister for

acquisition.

51.5 Once a right of way has been granted to a Licensee by

the Authority, no person shall build any structures or do

any activity on land within the proximity of the area

covered under the right of way without the prior approval

of the Authority.

51.6 When considering the acquisition of land and water and

seeking the right of way, the Minister shall give due

consideration to antecedent rights over land and water

and shall insofar as practicable and in the general interest

of the affected persons see that private and public

property and life are not placed in jeopardy.

52 Right over public, private and government land and
premises

52.1 A Licensee has the right over private, public and

government land and premises:

50

i) to enter upon any lands and sinks bores and make

surveys and do any other acts or things necessary

for sinking bores or making surveys;

ii) to draw, erect and maintain power lines and

clearances on either side;

iii) to enter with any equipment or devices, receive,

store, transmit, or supply electricity, water, on, near

or under, any land and may enter any land and fell

or remove any tree or part of a tree or any

obstruction which in the opinion of the Licensee is

necessary to fell or remove;

iv) to divert any waterway, lake, swamp or marsh, or

alter the bed, course or channel of any waterway;

v) to enter upon any public or private land or roads

and construct any works or place on under or over

any such land or road any structure or equipment

and may repair, alter or remove any such structure

or equipment or any works under its control; and

vi) to do all other things necessary for constructing,

maintaining, altering, or using any works or

undertakings of, or under the control of, the

Licensee,

for the purpose of this Act.

52.2 In the exercise of the rights under subsection 52.1 a

Licensee shall observe the environmental guideline or

51

regulation in force and must do as little damage as

possible and must, if required, make full compensation to

the owner of the land for any loss of income derived from

such land or damage caused to the land in consequence

of the exercise of the rights.

52.3 Compensation under subsection 52.2 shall be applicable

as per the prevailing rates notified by the Government.

52.4 A Licensee may exercise its power under this section by

its officers or employees or by any other person

authorized in writing by it or the officers or employees of

any such person.

52.5 A Licensee shall, except for the maintenance or repair of

an electric supply line, before entering any private land for

the purposes specified in 52.1, give sixty days notice to

the owner of the land, stating as fully and accurately as

possible the nature and extent of the acts intended to be

done.

52.6 The owner of the land for the purposes specified in 52.1

may, within thirty days after the receipt of the notice under

52.5, lodge a written objection with the Authority and the

Authority shall specify a date to inquire into the objection.

52

53 Water rights

53.1 The Minister may, on the submission of any licensed

generator, declare any lake, river or waterway or any part

thereof to be the source of water for the purposes of the

licensed generator as stipulated in the terms and

conditions of his licence and, in making the declaration,

the Minister may impose such conditions and restrictions

as he deems fit.

53.2 Notwithstanding anything contained in any written law, no

person shall dam or otherwise interfere with any such

source of water without first serving on the licensed

generator either personally or by the registered post

giving three months notice, in such form as may be

prescribed, specifying the work he proposes to undertake.

53.3 At any time before the expiry of the time specified in the

notice the licensed generator may, if he considers that the

work referred to in subsection 53.2 will materially affect

his functions, by notice in writing served on the person,

either personally or by registered post:

i) prohibit the person from proceeding with the work;

or

ii) attach conditions to the undertaking of the work by

the person.

53

53.4 Any person dissatisfied with the action taken by the

licensed generator under subsection 53.3 may appeal to

the Minister whose decision shall be final.

53.5 Any person who:

i) dams or otherwise interferes with any source of

water declared under subsection 53.1 without

serving the notice required by subsection 53.2;

ii) undertakes any work prohibited under this section;

and

iii) fails to comply with any conditions imposed under

this section,

shall be liable to pay a fine as determined by the

Authority.

53.6 Notwithstanding any declaration made under subsection

53.1, nothing in this section shall affect any licence

granted not less than thirty years before the date of the

declaration under any written law to divert water from any

lake, river or waterway, for the purpose of an installation,

the holder of which has not, in the opinion of the Minister,

made reasonable use, for the purposes of the installation,

of the rights arising out of the licence in connection with

any lake, river, waterway or part thereof declared to be

source of water.

54

53.7 Royalty on use of water and land resources may be

determined by the Authority.

55

PART 6

CONTINGENCY PROVISIONS

54 Application of contingency provisions

54.1 If it appears to the Minister that:

i) an event has occurred, or is about to occur, which

may materially endanger an undertaking of a

distribution company, a transmission company or a

generation company, including a person who

supplies electricity to another person or materially

affect the safe, economical or effective supply of

electricity;

ii) the available supply of electricity is, or is likely to

become less than is sufficient for the reasonable

requirements of the community;

the Minister may with the approval of the Cabinet

introduce certain contingency provisions which in his

opinion are necessary to safeguard the generation,

transmission, distribution and supply of electricity.

54.2 Any contingency provisions introduced by the Minister

under 54.1 may continue in force for a period not

exceeding six months and extension of such measures

shall be subject to the approval of the Cabinet.

56

54.3 Without limiting subsection 54.1 the Minister may, by

notice in writing, do all or any of the following:

i) give any directions that are necessary to control,

direct, authorize, conduct in relation to, restrict or

prohibit the supply, distribution, sale, use or

consumption of electricity;

ii) direct a person or body to carry out any work

required to ensure the generation, supply or

distribution of electricity;

iii) direct a person or body to maintain or operate any

services required to ensure the generation, supply

or distribution of electricity;

iv) requisition the use of property of any kind which is

used, or may be used, for or in connection with the

generation, supply or distribution of electricity;

v) operate, use, dispose of, distribute, store, repair and

maintain any such property;

vi) authorize a person specified in the notice to enter

any land, building or structure used for or in

connection with the provision of electricity;

vii) authorize a person specified in the notice to

withdraw the supply of electricity from any customer

the person reasonably believes is in breach of any

direction given under subsection 54.3 (i); and

viii) provide, by direction, for any matter or thing

incidental to the carrying into effect of the powers

referred to in this section.

57

54.4 A direction of the Minister:

i) may operate generally, or may be limited in its

operations according to specified time, places,

circumstances, condition or restrictions;

ii) may, if so specified in the direction, allow the

Minister to exempt a person or body from having to

comply with the direction;

iii) may be addressed or directed to people and bodies

generally or particularly;

iv) takes effect when made or, if a later time specified

in the direction, at that later time.

54.5 The Minister may at any time by direction under this

section amend or revoke a direction made, or purportedly

made, under this section or may return requisitioned

property.

54.6 If a direction of the Minister under subsection 54.5

amending an earlier direction for the purpose of correcting

a defect, mistake or omission:

i) includes the statement that the earlier direction is

deemed to have been made as so amended; and

ii) is made not later than three months after the earlier

direction was made,

58

the earlier direction is deemed to have been made as so

amended.

54.7 If the Minister requisitions the use of property under

subsection 54.3(iv) the reasonable costs of compensating

the owner of that property for the requisition and making

good any damaged resulting from the requisition must be

determined by the Minister.

54.8 Requisitioned property that has not been disposed of

must be returned as soon as it is safe to do so after the

Minister revokes a proclamation.

54.9 The amendment, revocation or expiry of a direction does

not affect:

i) the previous operation of the direction;

ii) the validity of any action taken under the direction

before the amendment, revocation or expiry; or

iii) any penalty or punishment incurred in respect of

any failure to comply with the direction before the

amendment, revocation or expiry or any proceeding

or remedy in respect of the penalty or punishment.

55 Compliance with contingency provisions

55.1 A person or body who is aware of a direction under

section 57 must comply with the direction.

59

55.2 A person:

i) to whom electricity is supplied; and

ii) who is aware of a direction restricting or prohibiting

the use of electricity,

must do everything reasonably possible to ensure that

electricity is not used on the land or premises to which the

electricity is supplied in contravention of the direction.

55.3 A person must not obstruct another person:

i) exercising a power given to; or

ii) complying with an obligation imposed on,

the other person under section 57 if the person has been

shown a copy of the notice giving the power or imposing

the obligation:

55.4 A person is deemed to be aware of a direction if the

Minister has caused:

i) the direction to be published in a newspaper

circulating throughout the area in which the direction

applies; or

ii) details of the direction to be broadcast or telecast by

means of radio or television throughout the area in

which the direction applies.

60

56 Offences during contingency provisions

56.1 An act or omission by any person which contravenes the

provisions of section 55 shall be an offence.

56.2 In any proceedings for an offence against this section, a

certificate purporting to be signed by the Minister to the

effect that details of a direction were broadcast or telecast

by means of radio or television throughout a particular

area on a specified day is prima facie evidence of the

facts set out in the certificate.

56.3 In any proceedings for an offence against this section, if a

direction was made in respect of part of a day and first

broadcast on that day, it is sufficient defense for the

defendant to prove that at the time of the offence, the

defendant:

i) did not know; and

ii) could not reasonably have known,

of the direction.

56.4 If an offence is committed by a person by reason of a

failure to comply, within the period specified in a direction

under subsection 55.1 with the requirements specified in

the direction, the offence, for the purposes of subsection

56.5 is deemed to continue so long as any requirement

61

specified in the direction remains undone, whether or not

the period has elapsed.

56.5 If, under subsection 56.4 an offence is deemed to

continue, the person who committed the offence commits

an additional offence on each day during which the

offence is deemed to continue and is liable, upon

conviction for such an additional offence, to a penalty not

exceeding one tenth of the penalty for the first-mentioned

offence.

56.6 If a body corporate commits an offence against this

section, any officer of the body corporate who was in any

way, by act or omission, directly or indirectly knowingly

concerned in or party to the offence is also guilty of that

offence and liable to the penalty for it.

56.7 A person may be charged in accordance with subsection

56.6 and prosecuted before the court of law.

56.8 If in a proceeding for an offence against this section it is

necessary to establish the intention of a body corporate, it

is sufficient to show that a servant or agent of the body

corporate had that intention.

56.9 In subsection 56.6 “officer”, in relation to a body
corporate, means:

62

i) a director, secretary or executive officer of the body

corporate;

ii) any person in accordance with whose direction or

instruction the directors of the body corporate are

accustomed to act; or

iii) a person concerned in the management of the body

corporate.

56.10 If this section provide that a person is guilty of an offence,

that reference to a person must:

i) in the case of partnership, be read as a reference to

each member of the partnership; and

ii) in the case of an unincorporated body or

association, be read as a reference to each member

of the committee of management of the body or

association.

57 Delegation by Minister

57.1 The Minister may, by instrument, delegate to any person

or body, all or any of the Minister’s powers and functions

under this Part, except this power of delegation.

57.2 The Minister may limit the delegation with respect to time,

place or circumstance.

63

58 Judicial notice

58.1 All courts and any person acting judicially must take

judicial notice of any proclamation, direction or general

requisition made, given or imposed under this Part.

59 Immunity from suit

59.1 A person acting in good faith in the execution of this Part

or any proclamation or direction under this Part is not

liable to any action, claim or demand on account of any

damage, loss or injury sustained or alleged to be

sustained because of the operation of this Part or of any

thing done or purporting to be done under this Part or any

proclamation or direction under this Part.

64

PART 7

SOCIAL OBLIGATIONS

60 Prescription of levies and issuance of directions

60.1 The Minister may, on the recommendation of the Authority,

prescribe levies for such matters and in accordance with

guidelines set by the Authority which include:

i) recovery of costs incurred in the delivery of

electricity to rural or remote customers of Bhutan;

and

ii) any other matters which further the objectives of this

Act as set out in section 60.3.

60.2 The Minister may, on the recommendation of the

Authority, prescribe the amount and the manner of

collection of such levy to be borne by Licensee and

customers, classes of customers.

60.3 The Minister may, on the recommendation of the

Authority, direct Licensees to undertake certain public

service obligation which may include obligations in

relation to:

i) the security of supply of electricity;

ii) regularity, quality and price of electricity;

iii) health and safety of person;

65

iv) environmental protection ;

v) use of renewable energy sources;

vi) promotion of efficient use of electricity; or

vii) assistance to the underprivileged or the

decentralization of development to provincial areas.

60.4 The Minister may, on the recommendation of the

Authority, issue general policy directions in relation to the

choice and diversification of fuel sources in the generation

of electricity.

61 Rural electrification

61.1 The Minister shall undertake to promote, support and

provide rural electrification programmes through public

and private sector participation in order to:

i) achieve equitable regional distribution access to

electricity;

ii) maximize the economic, social and environmental

benefits of rural electrification subsidies;

iii) promote extension of the grid and development of

off-grid electrification;

iv) promote renewable energy and

v) stimulate innovations within suppliers.

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PART 8

TECHNICAL REQUIREMENTS AND SAFETY

62 In carrying out electricity industry operation, a Licensee must
comply with the engineering and safety standards under the

regulations prescribed by the Authority.

63 In the event that the operation of a Licensee fails to comply with
the characteristics and standards referred to under section 64,

the Authority shall have the power to order the Licensee to

improve or to take corrective measures, pursuant to the

regulations prescribed by the Authority.

64 The technical characteristics and standards of equipment to be
connected to the power system shall be in conformity with the

regulations announced by the Authority.

65 The Authority may issue an instruction requiring that the
standards of certain categories of equipment to be connected to

the power system be tested and certified prior to their utilization

in energy services provision.

66 The Licensee shall have to undertake the maintenance, repair
and improvement of the power system, equipment and

appliances utilized in the energy business operation to ensure

that their efficiency and standards comply with the regulations

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referred to under section 64, if there is any damage or

breakdown, repair must be expeditiously taken to restore the

operation.

67 In establishing the technical characteristics and standards
referred to under section 64, the Authority may refer to the

characteristics and standards established by other agencies

under the authority and duties specified in other pieces of

legislation.

68 The Authority may assign, in his place, any other agency to be
responsible for the testing and certification of the technical

characteristics and standards under section 64.

68

PART 9

OFFENCES

69 The following acts shall be offences:
i) unauthorized tapping of electricity;

ii) contravention of any provisions of the terms and

conditions of supply prescribed by the licence or

any other law governing the supply and use of

electricity of rules and regulations framed

thereunder;

iii) unauthorized supply of electricity to any service;

iv) unauthorized supply of electricity to any service,

which was disconnected;

v) exceeding the contracted connected load without

specific permission of the Licensee;

vi) addition, alteration or extension of electrical

installation in the customer's premises without

permission of the Licensee or extension to any

premises other than one for which supply was

contracted for;

vii) non-compliance of orders imposing restriction on

use of energy for rational and equitable distribution

thereof;

viii) use of electricity for the purpose other than that for

which supply is contracted for;

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ix) resale of energy without the permission of the

Licensee;

x) obstruction to lawful entry by the authorized

officers/employees of the Licensee into the

customer's premises;

xi) tampering with or adjusting any installation or part of

an installation, or manufacturing or importing or

selling any equipment so as to cause or to be likely

to cause harm to human life or damage to any

equipment or other property;

xii) without the consent of the Licensee or the Authority,

affixing or causing to be affixed any advertisement,

bill or notice or any other paper against or upon or

otherwise defaces any building, post or bracket or

other equipment or the enclosure thereof used for or

in connection with any electrical installation;

xiii) damaging any meter or other instrument used on or

in connection with any licensed installation for

recording the output or consumption of energy;

xiv) extinguishing or damaging any public lamp or

defaces any post, bracket or other means of support

of a public lamp;

xv) undertaking any work or engage in any activity in

the vicinity of any electrical installation or part of the

installation in a manner likely to interfere with any

electrical installation or to cause danger to any

person or property;

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xvi) any act that may threaten power supply;

xvii) any act that may threaten system security; and

xviii) violation of any of the provision of this Act,

any person committing an offence shall be punished as

per the law of the land.

71

PART 10

MISCELLANEOUS

70 The Authority may, by statutory order, grant an exemption from
the requirement to hold a Licence for the generation, distribution

or sale of electricity by categories of persons or by a particular

person, for the promotion of rural electrification where the

generation capacity does not exceed 500 kilowatts but that

exemption shall not preclude the Authority from exercising its

other regulatory functions under this Act.

71 An exemption granted to persons of a particular class shall be
published in such manner, as the Authority considers

appropriate for bringing it to the attention of persons of that

class.

72 An exemption granted by the Authority under this section shall
be in writing and may be revoked in accordance with any term

contained in the exemption.

73 Unless previously revoked, an exemption will continue in
operation for such period as may be specified in or determined

by or under the exemption.

74 The Minister shall, in consultation with the Authority, lay down
administrative procedures for the regulation of electricity

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distribution and sales to customer activities involving generation

systems of a capacity not exceeding 500 kilowatts.

75 The Authority shall, within four months after the end of each
financial year, submit to the Minister, a statement of his activities

in the preceding financial year, containing such information as

the Minister may require.

76 The Authority shall also submit to the Minister, such other
reports on his activities or on any other matter as the Minister

may, from time to time, require.

77 The common seal of the Authority shall:

77.1 be in a form to be determined by the Authority; and

77.2 not be affixed to any document except by order of the

Authority.

78 The common seal of the Authority shall be authenticated by the
signatures of the Chief Executive Officer and two other

members of the Authority.

79 An instrument or contract which if executed or entered into by a
person other than a body corporate would not require to be

under seal, may be executed or entered into or on behalf of the

Authority by the Chief Executive Officer, or by any member of

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the Authority or by any other person if that member or the

Authority or other person has been duly authorized by

resolution of the Authority to execute or enter into the

instrument or contract as the case may be.

80 Every document purporting to be an instrument or contract
executed or issued by or on behalf of the Authority in

accordance with this section shall be deemed to be so

executed or issued until the contrary is proved.

81 Subject to section 82, all applications for licences and
documents related to resolution of disputes, handling of cases

regarding breaches of safety or technical regulations, or any

other matter dealt with by the Authority, shall be regarded as

public documents.

82 The Authority may, of his own motion or on the application of
the Licensee, exempt such documents as he may prescribe

from access to the public under section 81 in order to prevent

the revealing of business secrets and other sensitive matters.

83 The Authority shall keep a register in which shall be entered the
particulars of:

i) every exemption granted to a Licensee;

ii) every licence granted by the Authority;

iii) every modification or revocation of a licence;

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iv) every compliance order or revocation of a

compliance order; and

v) every requirement imposed and every consent or

approval given by the Authority under the terms of a

licence.

84 All decisions of the Authority shall be in writing and the
Authority shall give reasons for every decision made by him.

85 A member of the Authority or of a committee of the Authority is
not personally liable for any action done or omitted to be done

by him in good faith without negligence for the purposes of

carrying into effect the provisions of this Act.

86 An officer or employee of the Authority or other person acting
on behalf of the Authority is not liable for any act done by him in

good faith, without negligence, for the purpose of carrying into

effect the provisions of this Act.

87 The Authority shall, within twelve months after the
commencement of this Act, by statutory instrument, make

regulations relating to the generation, transmission, distribution,

retail, internal house wiring and utilization of the electricity

system.

88 Without prejudice to the generality of section 87, regulations
made under this section may provide for:

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i) standards regarding safety;

ii) technical equipment and skills;

iii) the quality of deliverance of electricity;

iv) the fees to be charged under this Act; and

v) any other matter necessary or convenient for giving

full effect to this Act.

89 The Authority shall, by statutory instrument, make regulations to
establish a Grid Code.

Done at the 79th session of the National Assembly of Bhutan on the
6th day of the 6th month of the Female Iron Snake Year corresponding
to 26 July, 2001.