MoP - Ministry of Power

CENTRAL ELECTRICITY REGULATORY
COMMISSION ( CERC )
The Central Electricity Regulatory Commission ( CERC )
an independent statutory body with quasi-judicial powers,
was constituted on 25 th July, 1998 under the Electricity
Regulatory Commission’s Act, 1998 and has been continued
under Electricity Act, 2003. The Commission consists of a
Chairperson and four other Members including the
Chairperson, CEA as the Ex-officio Member.
FUNCTIONS :
Under the Electricity Act, 2003 the Central Commission
discharges the following functions:-
Mandatory Functions -
(a) to regulate the tariff of generating companies owned
or controlled by the Central Government;
(b) to regulate the tariff of generating companies other
than those owned or controlled by the Central
Government specified in clause (a), if such generating
companies enter into or otherwise have a composite
scheme for generation and sale of electricity in more
than one State;
(c) to regulate the inter-State transmission of electricity ;
(d) to determine tariff for inter-State transmission of
electricity;
(e) to issue licenses to persons to function as transmission
licensee and electricity trader with respect to their inter-
State operations.
(f) to adjudicate upon disputes involving generating
companies or transmission licensee in regard to
matters connected with clauses (a) to (d) above and to
refer any dispute for arbitration;
(g) to levy fees for the purposes of the Act;
(h) to specify Grid Code having regard to Grid Standards;
(i) to specify and enforce the standards with respect to
quality, continuity and reliability of service by licensees.
(j) to fix the trading margin in the inter-State trading of
electricity, if considered, necessary;
(k) to discharge such other functions as may be assigned
under the Act.
Advisory Functions -
(i) formulation of National electricity Policy and tariff policy;
(ii) promotion of competition, efficiency and economy in
the activities of the electricity industry;
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(iii) promotion of investment in electricity industry;
(iv) any other matter referred to the Central Commission
by the Central Government.
ACTIVITIES DURING THE PERIOD 01.04.2007 TO
30.11.2007
1. Grant of permission for setting up of Power
Exchange
In line with the responsibility cast under Section 66 of the
Act, the Commission released Staff Paper on July 27, 2006
on “Developing a Common Trading Platform – Power
Exchange (PX)” for electricity trading in the country. Power
Exchange is mechanism for institutionalized, transparent
and efficient trading. Creation of common platform for
trading would help in further streamlining the trading process,
standardization of electricity as a tradable product, provides
security mechanism through a Clearing House and increase
business confidence in the power sector. The functional
mechanism of Power Exchange would be in line with the
Indian Electricity Grid Code (IEGC) and balancing
mechanism through Unscheduled Interchange (UI) rate. The
Commission sought for comments and suggestions from
all the stakeholders by August 31, 2006.
A public hearing was conducted on December 19, 2006 to
debate possibility of setting up a Power Exchange. More
than 150 stakeholders including CEA, generators,
distribution utilities, State Electricity Boards, traders,
commodity exchanges and IIT Mumbai participated in the
deliberations and some of them made detailed presentation.
In the interest of fair play and protection of consumer interest,
the stakeholders recommended that the Exchange should
function under regulatory oversight. It was clarified that the
existing long term contracts which cater to the more than
97% of the demand shall not be disturbed and as such there
was no basis to apprehend that electricity prices would
increase by creation of exchange.
The Power Exchange would be a voluntarily platform for
electricity trading, which will co-exist with other options for
trading already facilitated through open access. The
Exchange would have common price discovery principle
through double sided bidding by matching the aggregated
demand and supply both in terms of quantity and price. The
buyer would not be compelled to buy at a price higher than
the price quoted by him. Power Exchange would be a Day
Ahead exchange inviting bids for each one-hour time block
for the next 24 hours. The time line for the power exchange
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