IN RE: INDIAN ENERGY EXCHANGE Vs. STATE
LAWS(ET)-2015-7-3
CENTRAL ELECTRICITY REGULATORY COMMISSION
Decided on July 15,2015

In Re: Indian Energy Exchange Appellant
VERSUS
STATE Respondents

JUDGEMENT

- (1.) INDIAN Energy Exchange (IEX) has filed this petition for modification of Business Rules of the Exchange for giving effect to the directions of the Commission in order dated 8.4.2015 in Petition No. 006/SM/2015 allowing introduction of Extended Market Session in Power Exchanges.
(2.) THE Commission vide order dated 8.4.2015 in Petition No. 006/SM/2015 directed the Power Exchanges to operationalize the Extended Market Session within three months from the date of order. The operative portion of the said order is extracted as under: "9. The Commission directs the following: a. Power Exchanges should commence operation of round the clock intraday/contingency market within three (3) months from the date of issue of this order after undertaking all requisite modifications, formulation of appropriate risk management practices considering banking hours and testing and validations of the software application of the trading system, clearing and settlement system and any other applications needed. The features of the contingency/intra -day market shall be as under: i. The existing products for day ahead contingency and intraday markets would continue to be operated by the exchanges. As a principle, the timeline for these products is being extended so that trading window is open for periods as mentioned below: 1. Same day Delivery (upto 2400 hours): The trading window is open round the clock for delivery of power on the same day (minimum delivery period - 3 hours after contract execution subject to corridor availability) 2. Next day Delivery (0000 -2400 hours): The trading window opens after declaration of day ahead results and remains open till end of day. b. Power Exchanges are directed to submit for approval of the Commission the proposed amendments, if any, to rules, bye -laws or Business Rules along with views of the stakeholders on the views on the modifications and responses of the Power Exchanges on each of the views within 1 month of date of issue of this order. c. The Commission may review the functioning of round the clock intraday/contingency market after six (6) months from the date of operation of the market. d. POSOCO shall communicate approval/rejection of scheduling of bilateral transactions for intraday/contingency contracts and inform the Power Exchanges and the applicant within one (1) hour of receipt of such application. e. The staff paper mentioned that creation of open access registry, information of TTC/ATC and reduction of time between intraday trading and delivery are critical success factors for this market. The Commission is of the view that with tightening of the frequency band and deviation settlement mechanism coming into force, the market participants need other avenues to meet their contingency requirement of purchasing/selling the power at short notice. The resolution of the issues mentioned shall be taken up simultaneously with the introduction of 24x7 intraday/contingency market. f. The evening market based on collective transactions is kept in abeyance at present for reasons mentioned above." In compliance with the order of the Commission, IEX has filed proposed amendments to its Business Rules for approval by the Commission. The summary of proposals of IEX made vide affidavit dated 15.5.2015 are as under: "(a) IEX has submitted that it published a summary of proposed amendments to the Business Rules on its website i.e.and invited comments from stakeholders vide notice dated 2.5.2015. IEX has submitted that no comments have been received in response to the notice. IEX has proposed amendments to the Business Rules as under: (i) Term Ahead Market(TAM) Segment: Amendment in Schedule B Amendments have been proposed to align risk management to extended hours and to strengthen the risk management practices. (ii) Day Ahead Contingency Contracts: Amendment in contract specification Presently window for Day Ahead Contingency Contracts is available for trading everyday from 1500 Hrs. to 1700 Hrs. for trading of contracts for delivery from 0000 Hrs. to 2400 Hrs. on next day. In compliance of directions of the Commission IEX has sought amendments in the contract specifications to make the day ahead contingency market available for trading every day from 1500Hrs. to 2300 Hrs. for trading of contracts for delivery from 0000 Hrs. to 2400 Hrs. on the next day. Further modifications have been done in the pay -in and pay -out parameters to align risk management to extended hours. (iii) Intra -day Contracts: Amendment in contract specification Presently window for intra -day contracts is available for trading every day from 1000 Hrs. to 1700 Hrs. for trading of contracts for delivery from 1400 Hrs. to 2400 Hrs. on the same day. In compliance of directions of the Commission, IEX has sought amendments in the contract specifications to make the intra -day market available for trading from 0030 Hrs. to 2000 Hrs. for trading in contracts for delivery from 0400 Hrs. to 2400 Hrs. on the same day. Further, modifications have been done in the pay -in and payout parameters, to align risk management to extended hours."
(3.) AFTER detailed discussion with the staff of the Commission, IEX filed a revised proposal on 29.6.2015. Subsequently, IEX has sought amendment of the original petition vide affidavit dated 30.6.2015 and has requested to ignore the affidavit dated 29.6.2015.;


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