CERC Grants Interstate Electricity Trading License to Vibrant Energy

The company is required to start trading within a year

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The Central Electricity Regulatory Commission (CERC) has granted a trading license to Vibrant Energy Holdings Global India (VEH Global India) for interstate electricity trading across India.

The Commission noted that it was satisfied that the company met the requirements of the Trading License Regulations for the grant of an interstate trading license under Category IV.

VEH Global India had filed a petition seeking the trading license.

Background 

In accordance with the provisions of the Trading License Regulations, an entity applying for a Category IV trading license should have a net worth of ₹100 million (~$1.21 million). It should have maintained a minimum current ratio and liquidity ratio of 1:1 as of the date of the audited balance sheet accompanying the application.

As per the special balance sheet submitted by the developer, it possessed the required net worth, current ratio, and liquidity ratio for the grant of a Category IV trading license. Accordingly, the Commission, through a recent order, concluded that the developer was qualified for the license.

VEH Global India, in its submission, stated that it had received no objection in response to the public notice published by it. The developer noted that it would comply with the requirements specified in the Trading License Regulations during the subsistence of the trading license if granted.

Commission’s analysis

The Commission said that the grant of the trading license would be subject to the fulfillment of the following conditions:

  • The licensee should comply with the provisions of the Electricity Act and the Trading License Regulations
  • The licensee should not engage in the business of electricity transmission during the period of subsistence of the trading license
  • The licensee should charge trading margin strictly in accordance with the Trading License Regulations as amended from time to time
  • The licensee should regularly pay the annual license fee per the provisions of the CERC (Payment of Fees) Regulations, 2012, as amended from time to time or any subsequent enactment thereof
  • If the licensee failed to undertake trading in electricity within one year from the date of the license, the license would be liable for revocation under the provisions of the Electricity Act and the Trading License Regulations

The central regulator directed the developer to send a copy of the order to the Central Government under Section 15 of the Electricity Act, 2003.

Last November, CERC had granted an interstate trading license to ReNew Energy Markets to trade power across India.

CERC had issued amendments to its regulations for the payment of fees for electricity trading. The regulations came into effect on April 1, 2020.

Earlier, CERC had issued a notification to address the procedure, terms, and conditions for granting licenses for electricity trading.

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