CERC proposes new inter-State trading regulation 2008

New Delhi, Aug 21 (UNI) The Central Electricity Regulatory Commission today proposed inter-State trading regulations 2008, rather than going for amendment to the existing regulation 2004.

The CERC promulgated inter-State trading regulations in 2004 which were amended in 2006. The Electricity Act 2003 recognises trading as a separate licenced activity.

In the proposed regulations, inter-State trading has been modified in order to bring in cross-border power trading within its purview.

At present, the definition of inter-State trading does not cover transactions involving import from or export to any other country for resale of electricity.

The Commission has so far issued about 30 inter-State trading licences for different categories with most of the licencees either in the category of A or in the category of F barring few in between.

Hence, it is proposed to reduce the number of categories from six to three.

Net worth requirement as per the existing regulations varies from Rs 1.5 crore to Rs 20 crore depending on the category of licence.

Keeping in view the current price of traded power, the net worth requirement has been increased for the revised categories ranging from Rs 5 crore to Rs 50 crore.

Present regulations do not contain any stipulation on liquidity requirement. One can build up net worth without liquidity. The applicant may not have sufficient liquid assets in hand to meet the payment obligations in spite of meeting net worth requirement as per the regulations.

Introduction of current ratio and liquid ratio will indicate liquidity position of the applicant.

Hence, additional provision has been proposed in the draft regulations towards liquidity of the licensee in addition to net worth requirement.

UNI SBA MP ND2128