CERC caps prices bids on all segments of power exchanges at Rs 12/unit

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The Central Electricity Regulatory Commission (CERC) on May 6 passed an order capping price bids on all segments of power exchanges including term ahead marker (TAM), and green term ahead market (G-TAM) to Rs 12/unit. The order will be in force till June 30.

“In view of the analysis of price trends in the preceding paras and in order to balance the interests of investors in terms of reasonable return and protecting consumer interests, the Commission hereby directs the power exchanges, from the date of this order till June 30, 2022, to redesign, with immediate effect, their software in such a way that members can quote a price in the range of ₹0/kWh to ₹12/kWh in DAM (including G-DAM), RTM, Intra-day, Day Ahead Contingency and Term-Ahead (including G-TAM) Contracts", read the order.

The regulator took this step due to the increasing trend of rising prices on account of supply shortage and sudden increase in demand. CERC had already capped the Real-Time Market (RTM) and the Day-Ahead Market (DAM) at ₹12 per unit from the earlier ₹20 on exchanges on April 1.

The contracts, which have already been transacted till the date of issuance of this order, shall be delivered and settled as per the earlier terms and conditions, it added.

“Application of the price ceiling for a limited period is based on the belief of the Commission that intervention in the market should not be prolonged unless absolutely necessary in the public interest as in the existing circumstances prevailing in the country,” CERC pointed out.

The Commission said that analysing the recent behaviour in volume and prices at the power exchanges, based on the daily trade information published by them reveals that buy bids in DAM registered an increase of about 28 per cent in April as compared to March, while that in RTM increased by 144 per cent during the same period.

However, the cleared volume in DAM registered a decrease of about 30 per cent in April compared to March, while that in RTM decreased by 16 per cent during the same period.

The power exchanges are directed to submit the compliance of this direction within two days from the date of this order.