HC seeks CERC stand on plea challenging its power market regulations

The Delhi High Court Friday sought response of the Central Electricity Regulatory Commission (CERC) on a plea challenging its regulations which permit creation of power exchanges trading in electricity.

A bench of Chief Justice D N Patel and Justice Jyoti Singh issued notice to the CERC and three power exchanges seeking their stand on the petition by the Independent Power Producers Association of India.

The association, represented by advocates Rajshekhar Rao and Neeha Nagpal, has contended that creation of power exchanges was contrary to the provisions of the Electricity Act, 2003, National Electricity Policy, 2005 and the National Tariff Policy, 2005.

''Creation of power exchanges is to the detriment of the interests of authorized and legitimate licensees granted license under the Act,'' the petition has claimed, adding that they are ''defeating fair competition in the power sector, interest of consumers and supply of electricity to all areas''.

The association also represents interests of trading licensees who are authorised under the Act to purchase and sell electricity to consumers and other beneficiaries like distribution companies.

It has contended that the respondents -- Indian Energy Exchange, Power Exchange India Ltd and Pranurja Solutions Ltd, which has applied for permission to set up a power exchange -- are engaged in activities which amount to trading in electricity without having obtained a licence for the same as provided under the Act.

This, the association alleges, has resulted in ''manipulation of the price of power which, in turn, is causing unjustified and illegal losses to the participating state-owned PSUs and discoms''.