Regulator Extends Rs 12 Cap On Traded Electricity To Sep 30 On Power Exchanges

The Central Electricity Regulatory Commission (CERC), which had in an order on May 6 directed the Power Exchanges to cap power trading prices at Rs 12 till June 30, has extended the order to September 30 now. The order applies to trading in the Day Ahead market (DAM including Green DAM), RTM, Intra-day, Day Ahead Contingency and Term-Ahead (including GTAM) Contracts.

Citing its regular monitoring and the data submitted by the Power Exchanges and as available on the websites of CEA, POSOCO and National Power Portal, it noted that

a) The peak demand has been fluctuating and touched 204 GW in May 2022 and 212 GW in June 2022 (till 28th June, 2022).

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b) During the period from 7th May, 2022 till 28th June, 2022, the percentage of blocks in a day with MCP discovered at Rs.12/kWh ranged from 4% to 66% in Day Ahead Market (DAM) and from 2% to 53% in Real Time Market (RTM) at IEX.

c) The weighted average price of volume traded in Term Ahead Market (TAM), Intra day and Day Ahead Contingency (DAC) was around Rs. 8/kWh in the month of June 2022. Intra-Day contracts have also been trading at around Rs. 11/kWh in June 2022 (till 26th June, 2022).

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Thus, it assessed that the high demand for electricity is likely to continue over the next few months due to increase in economic activity, high agricultural load on account of sowing of kharif crops, and increase in household demand. This would continue to put upward pressure on prices Regulation 51 of the PMR 2021 provides as under: “51. Other circumstances requiring intervention (1) The Commission may, on being satisfied that a situation of abnormal increase or decrease in prices or volume of electricity in the Power Exchange exist or is likely to occur in the market, by an order, give such directions as may be considered necessary.”

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Thus, exercising its powers under said regulation, the CERC  has decided to extend the applicability of its May order to 30th September, 2022. The price cap of Rs 12, as has been apparent, has worked to an extent, preventing profiteering from some discoms at least.