The Central Electricity Regulatory Commission (CERC) has proposed a change in the definition of ‘inter-state trading’ that will enable companies to trade in power between India and its neighbouring countries like Nepal and Bhutan.
The regulator’s decision will help private participation in future power trading. “At present all the cross-border transactions of power are carried out by the government. We have identified increasing private involvement in power trading in the future. The new regulations are proposed to accommodate it,” said Alok Kumar, secretary, CERC.
In recent past, there have been a few instances of power trading across the border. For example, the Tala transmission project, which brings power from Bhutan to Delhi is being developed by Tata Power for Power Grid Corporation of India Ltd, the country’s largest power transmission company.
In another change in regulation, the draft proposes an increase in the net worth requirement of a company willing to acquire a trading licence ranging from Rs 5 crore to Rs 50 crore. The current net worth requirement for obtaining a trading licence ranges from Rs 1.5 crore to Rs 20 crore.
While such a move can mean detrimental for traders willing to obtain licence for power trading, experts believe that the move is according to requirement.
“Cost of power too has gone up now. So, there is enough rationale for the proposed increase in net worth requirement,” said an industry expert.
The regulator has also proposed a provision of non purchase of power from defaulting entities. Other proposals floated in the draft paper are introduction of new requirement of liquidity and rationalisation of payment security mechanism.
