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CERC Caps Prices Bids On All Segments of Power Exchanges at Rs 12/unit

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The Central Electricity Regulatory Commission (CERC) passed an order that caps price bids on all segments, including term ahead marker (TAM) and green term market (G-TAM), at Rs 12 per unit. This order will remain in effect until June 30.

“In light of the price trends analysis in the preceding paragraphs, and to balance investors’ interests in terms of reasonable returns and protecting consumers interests, the Commission directs power exchanges, starting from the date on this order until June 30, 2022 to immediately redesign their software so that members can quote prices in the range Rs0/kWh to R12/kWh in DAM, RTM, Intraday, Day Ahead Contingency, and Term Ahead (including GTAM) Contracts,” reads the order.

This was due to rising prices caused by sudden increases in demand and supply shortages. CERC had already set a cap on the Real-Time Market and Day-Ahead Market at Rs.12 per unit, compared to the earlier Rs.20 exchanges on 1st April.

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Contracts that have been concluded before the date of the issuance of this order shall be delivered and settled according to the earlier terms and condition, it added.

CERC stated that “Applications of the price ceiling for limited periods are based on the belief by the Commission that intervention into the market should be limited unless absolutely necessary to protect the public interest as it exists in the country.”

According to the Commission, an analysis of the behavior in volume and prices at power exchanges based on daily trade information published by them revealed that buy bids for DAM increased by about 28% in April compared with March. RTM however, increased by 144% in the same period.

The DAM cleared volume decreased by about 30% in April, whereas RTM declined by 16% in the same time period.

The order directs the power exchanges to comply within two days of the date of the order.

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