In a recent order, Central Electricity Regulatory Commission (CERC) said that it was still premature to grant approval to longer-duration contracts sought by Indian Energy Exchange (IEX) and Power Exchange of India Ltd (PXIL)
CERC, in its order dated July 27, 2021, said the matter of longer-duration contracts on power exchange will be taken up after Supreme Court delivers its judgment on three pending civil cases, concerning the issue of jurisdiction to control and regulate future contracts and derivative contracts in electricity.
CERC, in its order, was referring to pleas filed by two petitioners– Indian Energy Exchange (IEX) and Power Exchange of India (PXIL). The CERC order concluded by allowing IEX and PXIL to file fresh petitions, based on the outcome of the Supreme Court hearing on the aforementioned civil cases.
On its part, IEX was seeking introduction of additional Term Ahead contracts and Green Term Ahead contracts beyond T+11 days, on the exchange.
PXIL was seeking introduction of several future contracts including monthly contracts that could be traded on three-, two- and one-month ahead basis. The exchange also sought monthly contracts in renewable energy in the Green Term Ahead Market (GTAM). The petition also sought the introduction of Hydro Monthly Contract, among other prayers.
In a recent exclusive interview with T&D India, Prabhajit Kumar Sarkar, MD & CEO, PXIL, discussed PXIL’s plans of launching a slew of new term-ahead and green-energy based products. (Read full interview)
The petitions were filed on the basis of a communication from the Union power ministry, dated July 10, 2020, wherein the ministry, after considering the report of the Committee on “Efficient Regulation of Electricity Derivatives,” observed that CERC and SEBI may take necessary action in their respective areas of jurisdiction, which will be subject to the outcome of the Supreme Court verdict on the three civil cases discussed above.
Though the Supreme Court verdict is pending, the representative of IEX requested that CERC may initiate the process for approval of the additional term-ahead contracts and permit IEX to stake consultations with stakeholders, in this regard. The case came up for virtual hearing on July 23, 2021.
CERC, however, felt that it was premature to consider approval of these term-ahead contracts as the approval would be subject to the outcome of the decision of the Supreme Court in the three pending civil appeals.
Accordingly, CERC disposed off both the petitions (of IEX and PXIL) with the liberty to petitioners to approach CERC with fresh petitions on the matter, after the decision of the Supreme Court in the above-referred civil appeals.
The three civil appeals referred to in this story are:
- Civil Appeal No. 5292-5295/2011 (CERC v/s MCX and others)
- Special Leave Petition (Civil) No. 17300-17303/2011 (SEBI v/s CERC and others)
- Civil Appeal No. 5290-5291/2011 (PXIL v/s SEBI and others)
(Note: SEBI stands for Securities & Exchanges Board of India; MCX is Multi-Commodity Exchange of India Ltd)
(Featured photograph for illustration only)
