CERC Approves 1 Year Time Extension To PXIL To Comply With PMR 2021

In 2021, CERC notified ‘Power Market Regulation (PMR) 2021’ repealing previous PMR 2010. According to new PMR 2021, all existing power exchanges are required to realign their bylaws, rules and business rules in accordance to PMR 2021 and to seek approval from the commission within six months of enforcement of new regulations.

Accordingly, India’s one of the major power exchange, Power Exchange Of India Ltd (PXIL) prayed to commission for extension of time to comply with PMR 2021. The prayers of PXIL are given below.

Prayer A : Grant additional time period till 31.03.2024 for complying with the minimum net worth requirement under regulation 14 of PMR.

As per new PMR, any power exchanges in India have to maintain minimum 50Cr net worth at any given time. Accordingly, PXIL submitted their net worth trend from FY 18 to FY 21.

Thus as on 28.02.2022, PXIL maintain net worth of 46.58Cr. Thus PXIL is experiencing positive growth from FY 18 unto FY 21. Particularly, PXIL is seeing significant market share in term ahead market, renewable energy certificate (REC) & energy saving certificates. Also it has increased its outreach to all the members and various other market participants. Given the positive market outlook of power exchanges & third exchanges in India in anvil, the PXIL is targeting to meet the stipulated net worth criteria of 50Cr by 31.03.2024.

Prayer B : Grant additional time period till 31.03.2024 for complying with the minimum net worth requirement under regulation 14 of PMR 2021.

Accordingly to new PMR 2021, the shareholding pattern for equity holders in power exchanges should be as follows.

i. Any shareholder other than a member or a client, direct or indirectly, either individually or together with persons acting in concert, shall not acquire or hold more than 25% of the shareholding in the power exchange.

ii. A member or a client, directly or indirectly, either individually or together with persons acting in concert, shall not acquire or hold more than 55 of the shareholding in the power exchange.

iii. A power exchange can have a maximum of 49% of its total shareholding owned by entities, which are member or client, directly or indirectly, either individually or together with persons acting in concert.

PXIL claim new investment in shareholding by NVVNL in recent time which validate more investors are interested in future power exchange market in India. Also PXIL is in active discussion with market participants for equity participation. Accordingly, PXIL asked for additional time period until 14.08.2025, which will promote competition in the power market which will ultimately benefit the consumer.

Prayer C : Approve the changes proposed in Bye-laws, rules and business rules of exchange under regulation 12 of the PMR.

Prayer D : Exempt levy of ISTS charge and loss and permit submission of application to SLDC any for scheduling an intrastate transaction wherein the buyer and the seller are connected to intra state network of the state for contracts approved under PMR 2021.

Commission’s Analysis :

After hearing all prayers of PXIL, commission concluded its orders as below.

1. After analyzing all inputs from petitioner in the matter of maintaining minimum net worth of 50Cr, commission given extension time until 31.03.2023 to comply with PMR 2021 regulation.
2. After analyzing all inputs from petitioner in the matter of share holding pattern, commission given extension time until 31.03.2023 to comply with PMR 2021.
3. In the matter of approval of the changes proposed in Bye-laws, rules and business rules of exchange under regulation 12 of the PMR, commission indicated its observation/ direction in separate annexure of the order. Also commission directed PXIL to amend its bylaws, rules and business rules.
4. In the matter of Exempt levy of ISTS charge and loss and permit submission of application to SLDC, commission rejected the prayer due to the matter is out of the purview of commission’s lookout.