Central Electricity Regulatory Commission (CERC) has granted interstate trading licence to REC Power Development & Consultancy Ltd (RECPDCL), a wholly-owned subsidiary of REC Ltd.
In a very recent order, CERC has issued RECPDCL, “Category I” licence that enables RECPDCL to engage in inter-state trading in electricity in the whole of India. The licence has a validity period of 25 years.
It may be noted that in its previous order dated December 26 2024, CERC concluded that RECPDCL was prima facie qualified to grant of Category I licence for inter-state electricity trading, and had directed RECPDCL to issue a public notice seeking suggestions/objections from the general.
As no objections/suggestions were received to the public notice issued on December 28, 2024, CERC proceeded to grant the final licence.
It may be noted that during the tenure of the trading licence, RECPDCL will not be allowed to engage in the business of electricity transmission. Accordingly, RECPDCL, in its affidavit of July 18, 2024 placed before CERC had indicated that it will not apply for transmission licence (interstate or intrastate) without surrendering its trading licence.
Developer of RTM projects
In an independent development, RECPDCL is seeking to become a project implementation agency (PIA) for transmission projects under the regulatory tariff mechanism (RTM) modality.
It is reliably learnt that RECPDCL has put up this request to the National Committee on Transmission (NCT). RECPDCL is expected to make a presentation to NCT showcasing the company’s suitability as PIA for transmission projects under the RTM route. The matter is likely to be taken up at NCT’s next meeting.
Currently, RECPDCL is very much involved as PIA in the power T&D space, especially for sub-transmission and distribution projects, including smart metering. It is also active in the renewable energy space as PIA of solar PV projects.
Most importantly, it plays the role of a bid process coordinator (BPC) for intrastate and interstate transmission projects, developed under the tariff-based competitive bidding (TBCB) mechanism.
Based on T&D India’s interactions with industry experts, RECPDCL’s proposed foray as PIA for RTM-driven power transmission projects will not interfere with its role as BPC as there is no involvement of BPCs for projects awarded under the RTM modality.
Also, as pointed out by an industry player, RECPDCL’s potential eligibility as PIA for RTM-based power transmission projects, connotes that it would become a transmission licensee.
If RECPDCL becomes eligible for developing RTM-based interstate transmission projects, it will need to apply for transmission licence to CERC. In doing so, RECPDCL might need to give up its trading licence, technically speaking.
RTM modality
Under the RTM mode, the competent authority decides to award a transmission project to an implementing agency, usually Power Grid Corporation of India Ltd (PGCIL) or any private power transmission developer. This implementing agency could be the entity itself or its TBCB subsidiary. The competent authority in this case could be Central Transmission Utility of India Ltd (CTUIL) or the National Committee on Transmission (NCT). The Union power ministry is involved, to provide concurrence, if the cost of the project transmission project in question exceeds Rs.500 crore.
The RTM route is likely to get prominence in view of the NCT’s recent decision to adopt the RTM route if the originally-planned TBCB route does not generate adequate response, in that there is no bidder or a single bidder.
Featured photograph for representation only
