Airvoice Power Trading Private Limited
Inter State Trading of Electricity
Regulatory note
Demand Side Management (DSM)
Recommendation of Integrated Energy Policy for DSM












Inter State Trading of Electricity

The Central Electricity Regulatory Commission (CERC) has issued final Regulations for Inter-State Trading of Electricity after taking into account the suggestions and comments received from the stakeholders. The Electricity Act, 2003, recognises trading as an independent activity and accordingly prescribes issue of trading licences by the CERC for inter-state trading. The Commission earlier received applications from various companies for issue of trading licences immediately after the enactment of the Electricity Act, 2003 and the Commission had permitted all of them to continue trading till 31.3.2004 or till the issue of Regulations by the Commission whichever was earlier. After Notification of Trading Regulations, the interested parties could file fresh applications before CERC, seeking inter-state trading licences, in accordance with these Regulations. The Commission is also initiating actions for preparation of Regulations for establishment of a market mechanism for electricity. The Regulations for market mechanism will be done after following a transparent process as is the normal practice of the Commission.

The highlights of the final Regulations for inter-state trading are as follows:

1. The Regulations provide for trading carried out bilaterally between the generating company including captive generating plant, distribution licensee and electricity trader on the one hand and the electricity trader and the distribution licensee on the other.

2. The Inter-State Trading Licence shall be granted for 25 years.

3. The Regulation prescribes the application form for trading licence. The application fee is Rs.1.00 lakh which is subject to adjustment after the same is prescribed by the Central Government. A model licence document is also appended to the Regulations.

4. The Regulations also specify the methodology for publication of the licence application. The application shall be published in at least two national English daily newspapers including one economic newspaper and two local newspapers falling within the areas of trading, one of which shall be in vernacular. The entire application shall also be posted on the website.

5. The applicant for the licence shall file his comments on the objections or suggestions received in response to the public notice.

6. The technical requirements for being an electricity trader stipulates having at least one full time professional each with experience in

i) Power System Operations and commercial aspects of Power Transfers and

ii) Finance, Commerce and Accounts.

7. Capital adequacy requirement for various categories has been stipulated.

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