Decided on April 08,2015

In Re: Extended Market Session On Power Exchanges Appellant
STATE Respondents


- (1.) SECTION 66 of the Electricity Act, 2003 provides for development of market (including trading) in power as under: "66. Development of market - The Appropriate Commission shall endeavour to promote the development of a market (including trading) in power in such manner as may be specified and shall be guided by the National Electricity Policy referred to in Section 3 in this regard."
(2.) THE Commission in pursuance of objectives of maintaining grid security and grid discipline as envisaged under the Central Electricity Regulatory Commission (Indian Electricity Grid Code), Regulations, 2010 and subsequent amendments, has further narrowed the operating frequency band. This coupled with deterrent provisions in the regulations on Deviation Settlement Mechanism is aimed at inducing the grid connected entities to increasingly bank on scheduled transactions rather than on Unscheduled Interchanges (UI).
(3.) IN order to provide the grid -connected entities with measures to respond optimally and in pursuance of development of market, the staff of the Commission published a staff paper on Extended Market Session on Power Exchanges. Following options were explored for operating additional contracts on the power exchanges: - "i. 24x7 intraday/contingency contracts - Operating day ahead contingency contracts in remaining hours after gate closure of day ahead market on power exchanges and operating intraday contracts on 24x7 basis; ii. Evening market - Operating Day ahead auction based on collective transaction in the evening on power exchanges; and operating intraday contracts on 24x7 basis." The staff paper deliberated on various aspects of the two options and proposed operating additional contracts on power exchange for intraday/contingency market. The paper proposed the details of the contract as: "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: a. 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). n b. Next day Delivery (0000 -2400 hours): The trading window opens after declaration of day ahead results and remains open till end of day. ii. Price discovery mechanism remains as is for the respective products. iii. The Power Exchanges should workout the finer aspects of auction window timings, duration of contract availability and rolling contracts structure. They should submit the contract specification to the Commission as a part of the response to the discussion paper. iv. The exchanges may be mandated to run the extended session of contingency and the intraday markets for six months on a pilot basis and provide feedback for any adjustments. v. For the benefit of the market, the exchanges should widely publicize the availability of intraday and day ahead contingency the new products through seminars and workshops with market participants. vi. NLDC should endeavor to provide latest information about available Transmission Margins on inter regional links based on the state of the grid to facilitate any transaction in intra -day market." ;

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