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New guidelines for power trading

By Our Special Correspondent

NEW DELHI DEC. 10. In the first step towards developing a market for power, the Central Electricity Regulatory Commission today issued draft regulations for inter-state power trading. The regulations specify the requirements of being an electricity trader including technical norms, capital adequacy and credit worthiness.

The new guidelines envisage that the trading will initially be carried out only through bilateral contracts between generators and traders on the one hand and traders and licensees on the other hand. In due course of time, the state electricity commissions are expected to follow the lead of the central commission in introducing open access in transmission and the trading regulations will be reviewed from time to time to take into account such developments, the CERC says in a statement.

It says the introduction of trading licensees is expected to promote trading and will facilitate better utilisation of generation capacity. It is also expected to facilitate harness of the bottled up energy of captive power plants as well if the sale rate of power is attractive, taking into account wheeling charges, transmission losses and trading margin, the commission states.

The CERC has divided the trading licensees into six categories based on capital adequacy and credit worthiness. The net worth ranges from Rs. 2 crores to Rs. 25 crores, while the annual licence fee ranges from Rs. 1 lakh to Rs. 15 lakhs. The licence will be valid for 25 years.

The Commission says the Electricity Act 2003 recognises trading as a distinct activity with the regulator being entrusted with the responsibility of regulating the market. The commission has been permitting existing applicants for licences to carry out trading in electricity at their own risk by complying with existing laws and regulations till the licence application is processed as per the commission's regulations.

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