Central Electricity Regulatory Commission (Power Market) Regulations, 2021

Central Electricity Regulatory Commission (Power Market) Regulations, 2021

CENTRAL ELECTRICITY REGULATORY COMMISSION 

NOTIFICATION

New Delhi, the 15th February, 2021

No. L-1/257/2020/CERC.—In exercise of powers conferred under Section 66 read with sub- section (1) of Section 178 and clause (y) of sub-section (2) of Section 178 of the Electricity Act, 2003 (36 of 2003) and paragraph 5.7.1(f) of the National Electricity Policy, and all other powers enabling it in this behalf, and after previous publication, the Central Electricity Regulatory Commission hereby makes the following regulations, namely:

1. Short title and commencement

 Part- I Preliminary

 (1) These regulations may be called the Central Electricity Regulatory Commission (Power Market) Regulations, 2021.

(2) These regulations shall come into force from the date to be separately notified by the Commission.

2. Definitions and Interpretation

(1) In these regulations, unless the context otherwise requires,

(a) ―Act‖ means the Electricity Act, 2003 (36 of 2003);

(b) ―Ancillary Services‖ shall have the same meaning as defined in the Grid Code;

(c) ―Ancillary Services Contract‖ means a contract for providing Ancillary Services;

(d) ―Associate‖ in relation to a Power Exchange or Trader Member or Proprietary Member or Facilitator Member of a Power Exchange, as the case may be, means associate company or related party as defined in sub-sections (6) and (76) of Section 2 of the Companies Act, 2013 (18 of 2013) respectively;

(e) ―Automated audit trail‖ means automated creation and maintenance of electronic time- sequenced record of transactions (creation, modification or deletion) in the Power Exchange for reference or audit at a later date or time;

(f) ―Bid‖ means the electronic document by which a member of a Power Exchange submits price

and quantity in relation to a contract, for which it seeks to make a transaction;

(g) ―Bid type‖ means the category of bids with distinct specifications as applicable in relation to each contract to be transacted on a Power Exchange;

(h) ―Board‖ means the Board of Directors of a Power Exchange;

(i) ―Cartelization‖ means an act by Market Participants who, by agreement amongst themselves, limit or control or attempt to limit or control generation, distribution, sale, price or trade of electricity;

(j) ―Capacity Contract‖ means a contract where the capacity of a generating station is contracted in advance wherein the generating station is obligated to despatch contracted electricity as and when required by such buyer during the tenure of the contract and consideration by way of capacity payment is made by the buyer;

(k) ―Circular Trading‖ means and relates to trading and transactions by a member or group of members, wherein on one side, one or more entities of the member or group of members enter buy bids and on the other side, one or more entities of the same member or same group of members enter sell bids or vice versa, by design to manipulate the price of electricity or by design to create an artificial market or to defraud or misuse the system;

(l) ―Clearing‖ means the process of determination of obligations of members of a Power Exchange

resulting from the conclusion of a transaction at the Power Exchange;

(m) ―Client‖ means a person who has executed an agreement with a member of a Power Exchange for dealing with or clearing through such member;

(n) ―Collective Transactions‖ means a set of transactions executed in the Power Exchange(s) and whose price is discovered through anonymous and simultaneous competitive bidding by buyers and sellers;

(o) ―Conduct of Business  Regulations‖ means the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999, as amended from time to time and any re-enactment thereof;

(p) ―Contingency Contract‖ means a contract wherein Continuous Transactions occur on day (T) after the finalization of day ahead transactions and the delivery of electricity is on the next day (T+1);

(q) ―Continuous Transactions‖ means a set of transactions executed in the Power Exchange(s), not being Collective Transactions, where the buy bids and the sell bids are matched on a continuous basis with price-time priority;

(r) ―Contract‖ means an agreement between seller and buyer for sale and purchase of electricity or Renewable Energy Certificate or Energy Savings Certificate or any other product as may be decided by the Commission;

(s) ―Day Ahead Contract‖ means a contract wherein Collective Transactions occur on day (T) and delivery of electricity is on the next day (T+1);

(t) ―Day Ahead Market (DAM)‖ means a market where Day Ahead Contracts are transacted on the Power Exchange(s);

(u) ―Energy Savings Certificates Regulations‖ means the Central Electricity Regulatory Commission (Terms and Conditions for Dealing in Energy Savings Certificates) Regulations, 2016, as amended from time to time and any re-enactment thereof;

(v) ―Gate closure‖ refers to the time at which the bidding for a specific delivery period closes and no further bidding or modification of already placed bids can take place for the said delivery period;

(w) ―Grant of Connectivity Regulations‖ means the Central Electricity Regulatory Commission (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter-State Transmission and related matters) Regulations, 2009, as amended from time to time and any re- enactment thereof;

(x) ―Grid Code‖ means the Central Electricity Regulatory Commission (Indian Electricity Grid

Code) Regulations, 2010, as amended from time to time and any re-enactment thereof;

(y) ―Independent Director‖ means a Director as defined in sub-section 47 of Section 2 of the Companies Act, 2013;

(z) “Insider” means a person:

(i) who is or has been, during the six months prior to the concerned event, associated with the Power Exchange, directly or indirectly, in any capacity including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a Director, officer or an employee of the Power Exchange or by holding any position including a professional or business relationship with the Power Exchange whether temporary or permanent, that allows such person, directly or indirectly, access to unpublished price sensitive information about transactions on a Power Exchange;

(ii) who is in possession of or has access to unpublished price sensitive information about transactions on a Power Exchange;

(iii) who has acquired unpublished price sensitive information through criminal activity.

(aa) ―Insider Trading‖ by an Insider means:

(i) communicating, providing, or allowing access to any unpublished price sensitive information, to any person including other Insiders except where such communication is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations;

(ii) recommending any person, on basis of unpublished price sensitive information, to acquire or dispose of any contract on the Power Exchange, to which that information relates.

(ab) ―Intraday Contract‖ means a contract wherein Continuous Transactions occur on day (T) and delivery of electricity is on the same day (T), such that its delivery period does not overlap with the specified delivery period of the Real-time Contract transacted in the same bidding session as that of the Intraday Contract;

(ac) ―Load Despatch Centre‖ (LDC) means the National Load Despatch Centre (NLDC) or Regional

Load Despatch Centres (RLDC) or State Load Despatch Centres (SLDC), as the case may be;

(ad) ―Managing Director‖ means a Director as defined in sub-section 54 of Section 2 of  the Companies Act, 2013;

(ae) ―Market‖ means a platform where buyers and sellers, either directly or through  Trading Licensees, or through Power Exchanges, buy or sell electricity or Renewable Energy Certificates or Energy Savings Certificates or any other product as may be decided by the Commission;

(af) ―Market Coupling‖ means the process whereby collected bids from all the Power Exchanges are matched, after taking into account all bid types, to discover the uniform market clearing price for the Day Ahead Market or Real-time Market or any other market as notified by the Commission, subject to market splitting;

(ag) ―Market Coupling Operator‖ means an entity as notified by the Commission for operation and

management of Market Coupling;

(ah) ―Market Manipulation‖ means:

(i) entering into any transaction on the Power Exchange by any Market Participant, which:

(1) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of any of the contracts;

(2) secures or attempts to secure, by any member of the Power Exchange or client, relatively higher sale price while curtailing supply to other beneficiaries entitled to receive the same power;

(ii) disseminating any information through the media which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of any of the contracts;

(ai) ―Market Participants‖ shall include:

(1) grid connected entities;

(2) Power Exchanges;

(3) Members of Power Exchanges;

(4) Trading Licensees;

(5) Market Coupling Operator;

(6) OTC Platform;

(7) Any other entity as notified by the Commission.

(aj) ―Market Splitting‖ means the mechanism adopted by the Power Exchange or Market Coupling Operator, as the case may be, for discovering price of electricity in various bidding areas or zones facing congestion in transmission corridor, whereby these bidding areas or zones are split into independent markets and the flow of electricity between these independent markets is permitted to the extent of available transmission corridor under safe grid operating conditions;

(ak) ―Member of Power Exchange‖ means a person who has been admitted as such by a Power Exchange in accordance with these regulations and in accordance with bye-laws, rules and business rules of the concerned Power Exchange;

(al) ―Net worth‖ means aggregate  value of the paid-up  equity share capital and compulsorily convertible preferential shares and free reserves (excluding reserves created out of revaluation and write back of depreciation) reduced by the aggregate value of accumulated losses, deferred expenditure (including miscellaneous expenses) not written off and loans and advances to and investment made in the Associates;

(am) ―Open Access Regulations‖ means the Central Electricity  Regulatory  Commission  (Open Access in inter-State Transmission) Regulations, 2008, as amended from time to time and any re-enactment thereof;

(an) “Over  the  Counter  (OTC)  Contracts‖  means  the  contracts  transacted  outside  the  Power Exchanges;

(ao) ―Over the Counter (OTC) Market‖ is a market where OTC Contracts are transacted between the sellers and the buyers directly or through a Trading Licensee;

(ap) ―Over the Counter (OTC) Platform‖ is an electronic platform for exchange of information amongst the buyers and sellers of electricity;

(aq) ―Payment of Fees Regulations‖ means the Central Electricity Regulatory Commission (Payment

of Fees) Regulations, 2012, as amended from time to time and any re-enactment thereof;

(ar) ―Persons acting in concert‖ shall have the same meaning as assigned to it in clause (q) of sub- regulation (1) of Regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended from time to time and any re-enactment thereof;

(as) ―Power Exchange‖ means an electronic platform registered as a Power Exchange under these regulations;

(at) ―Real-time Contract‖ means a contract other than Day Ahead Contract or Intraday Contract or Contingency Contract, wherein Collective Transactions occur on day (T) or day (T-1) and delivery of electricity is on day (T) for a specified delivery period;

(au) ―Real-time Market‖ means a market where Real-time Contracts are transacted on the Power Exchange(s);

(av) ―REC Regulations‖ means the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010, as amended from time to time and any re-enactment thereof;

(aw) ―Settlement‖ means the process of discharging the obligations of members or clients of such members resulting from conclusion of a transaction at a Power Exchange;

(ax) ―Settlement Guarantee Fund (SGF)‖ means a fund created and maintained by Power Exchange and used for settlement of defaults of its members or clients of such members as stipulated in the default remedy mechanism of Power Exchange and shall comprise of any sources of funds as may be determined by the Power Exchange with prior approval of the Commission;

(ay) ―Shareholder Director‖ means a Director of the Power Exchange who represents the interests of shareholders, and is elected or nominated by such shareholders;

(az) ―Sharing Regulations‖ means the Central Electricity Regulatory Commission (Sharing of Inter- State Transmission Charges and Losses) Regulations, 2020, as amended from time to time and any re-enactment thereof;

(ba) ―Term Ahead Contract‖ means a contract (including Green Term Ahead Contract) wherein transactions occur on day (T) and physical delivery of electricity is on a day more than one day ahead (T + 2 or more);

(bb) ―Term Ahead market‖ means a market where Term Ahead Contracts are transacted on the Power Exchange(s);

(bc) ―Trading Licence Regulations, 2020‖ means the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for grant of trading licence and other related matters) Regulations, 2020, as amended from time to time and any re-enactment thereof;

(bd) ―Trading Licensee‖ shall have the same meaning as defined in Trading Licence Regulations, 2020;

(be) ―Transaction fee‖ means the fee payable (in Rs./kWh) by members or clients, as applicable, for transactions on a Power Exchange;

(bf) “unpublished price sensitive information” means any information, relating to contracts transacted on the Power Exchange, that is not generally available which upon becoming generally available, is likely to materially affect the price of the contract and shall ordinarily include, but not restricted to, information relating to the following contracts:

(i) Day Ahead Contract;

(ii) Real-time Contract;

(iii) Intraday Contract;

(iv) Contingency Contract;

(v) Term Ahead Contract.

(2) Save as aforesaid and unless repugnant to the context or if the subject-matter otherwise requires, words and expressions used in these regulations and not defined, but defined in the Act or other regulations made thereunder by the Commission shall have the meaning assigned to them in the Act or other regulations made by the Commission.

Part – 2

Scope of Regulations and Extent of Application

3. These regulations shall apply to ……………………… Click here to read more.