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CERC issues ‘Category IV’ licence to THDC India Ltd for inter-State trading in electricity in whole of India

central electricity regulatory commission

Central Electricity Regulatory Commission: In an application filed under Section 14 of the Electricity Act, 2003 (“the Act”) read with Regulation 6 of the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for grant of Trading Licence and other related matters) Regulations, 2020 (“the Trading Licence Regulations”) for grant of Category `IV` trading licence for inter-State trading in electricity in whole of India, the four-member bench of Jishnu Barua (Chairperson), P.K Singh(Member), Arun Goyal(‘Member') and I.S. Jha (‘Member') was satisfied that THDC India Limited meets the requirements of the Act and the Trading Licence Regulations for grant of inter-State trading licence for Category ‘IV’. Thus, directed to issue Category IV licence to THDC India Limited for inter-State trading in electricity in whole of India.

In accordance with Section 15(2) of the Act read with Clause (4) of Regulation 6 of the Trading Licence Regulations, notices were published by the Petitioner (THDC India Limited) in ‘The Indian Express' (All Editions), ‘Financial Express' (all Editions), ‘The New Indian Express' (Chennai Edition), ‘The Assam Tribune' (Guwahati Edition). The petitioner submitted that no objection has been received in response to the public notices.

The Commission said that in accordance with Regulation 3(3) of the Trading Licence Regulations, for a person applying for Category `IV`, a trading licence should have a net worth of Rs. 10 crore and should have maintained minimum current ratio and liquidity ratio of 1:1, as on date of audited balance sheet accompanying the application.

On perusal of the Special Balance Sheet submitted by the Petitioner, the Commission noted that THDC India Limited possesses the required net worth for grant of Category “IV” trading licence. Further, the Commission vide its order dated 10-4-2023, has relaxed the current ratio and liquidity ratio requirement in public interest. Thus, the Commission concluded that THDC India Limited is prima facie qualified for grant of Category “IV” licence for inter-State trading in electricity.

The Commission granted trading licence to THDC India Limited (licensee) subject to the fulfillment of the following conditions throughout the period of subsistence of the licence:

(a) The licensee shall not trade electricity generated by it based on the licence granted to it;

(b) The licensee can purchase and sale power involving other entities;

(c) The licensee shall maintain separate accounts for trading activity by treating it as a separate cost center;

(d) The licensee shall comply with the provisions of the Act, the Rules and the Regulations, particularly, Trading Licence Regulations, orders, directions issued by the Commission from time to time and any other law in force;

(e) The licensee shall comply with orders and directions issued by the Commission from time to time;

(f) The licensee shall not engage in the business of transmission in electricity during the period of subsistence of the trading licence;

(g) The licensee shall charge trading margin strictly in accordance with Trading Licence Regulations as amended from time to time;

(h) The licensee shall continue to be governed by the qualifications and disqualifications specified in Chapter 2 of the Trading Licence Regulations during the subsistence of licence;

(i) The licensee shall continue to abide by the terms and conditions of licence specified in Chapter V of the Trading Licence Regulations, as amended from time to time;

(j) The licensee shall regularly pay the annual licence fee in accordance with the provisions of the Central Electricity Regulatory Commission (Payment of Fees) Regulations, 2012, as amended from time to time or any subsequent enactment thereof;

(k) Non-compliance of the provisions of the Act, Rules, Regulations and the provisions of Trading Licence Regulations shall make the licence of the Petitioner liable for revocation.

[THDC India Limited, In Re, Petition No. 37/TD/2023, Order dated 06-05-2023]


Advocates who appeared in this case :

For Petitioner: Advocate Anushree Bardhan

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