Public hearing on power exchange tomorrow

New Delhi, Dec 18 (UNI) The Central Electricity Regulatory Commission (CERC) would conduct a public hearing tomorrow to deliberate on the pros and cons of organising electricity trading in the country through a common platform, usually called 'Power Exchange'.

The talk will also revolve around the right time for launching a Power Exchange and its ownership and organisational structure whether there should be any capping mechanism for keeping the prices under check.

The debate would also be on the handling of transmission congestion by the Power Exchange and how the transmission charges and transmission losses should be levied on the Power Exchange.

Whether a fixed transmission capacity should be assigned to a Power Exchange and how to increase liquidity and depth of supply in the Power Exchange, financial clearing mechanism including payment security issues and market monetary mechanism etc.

The Commission has already facilitated electricity trading by issuing inter-state trading licenses to 21 traders.

At present, the electricity trading is facilitated by the Open Access in Inter State Transmission introduced by the Commission in 2004, which is user friendly and enables bilateral trading on the basis of advanced reservation, current reservation, day ahead reservation and on the same day basis by payment of transmission charges for the MW quantum of electricity to be traded.

While section 61 and 62 of the Electricity Act, 2003 lay down a statutory frame work for regulation of electricity prices, section 63 of the Act seeks to move away from regulated tariffs through a competitive bidding prices on the basis of transparent bidding guidelines.

Further, section 66 of the Act provides that the Regulatory Commission shall endeavour to promote development of electricity market in line with the National Electricity Policy. The National Electricity Policy issued by the Central Government in 2005, had sought that the Regulatory Commission take action for development of power market in consultation with the various stake holders.

Due to the unique nature of electricity, organising electricity market through a Power Exchange requires a structured approach and sophisticated design, taking into account the national laws, grid conditions and organisation of the generation, transmission and distribution industry.

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