CERC notifies power market regulations

The Central Electricity Regulatory Commission (CERC) has issued fresh regulations governing various contracts related to trading in electricity, including inter-state sales.

The `Power Market Regulations, 2010,' issued under the provisions of the Electricity Act, aims at taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and enhancing supply of electricity, an official release said.

The new regulations will apply to all types of inter-state contracts related to electricity, whether these are transacted directly, through electricity traders, on power exchanges or on other exchanges, the release said.

The regulations will cover spot contracts, term contracts, derivatives and other electricity related contracts as specified in the regulations.

For launching electricity related contracts on exchanges would require permission of the Central Electricity Regulatory Commission. However, the contracts already permitted on power exchanges will not require fresh approval, it said.
 
The commission would permit derivative contracts which could be financially settled and certain other type of contracts at a future date taking into account the availability of electricity supply, liquidity and maturity of the electricity markets in the country.

No separate approval is required for the contracts to be dealt with by electricity traders. However, electricity traders would be able to deal with derivatives, which could be financially settled only after such contracts have been permitted by the commission.