However, MCX in its review petition argued that the futures contracts, which were being traded on MCX's platform did not envisage physical delivery of electricity. Therefore, to say that the weekly and monthly contracts would necessarily involve physical delivery was incorrect. Further, MCX submitted that CERC had erroneously come to the conclusion that the contracts for sale and purchase of electricity would necessarily to result in delivery. Besides, CERC's conclusions that the day-ahead and week-ahead contracts, on the ground that the payment of price of electricity purchased was simultaneous with delivery, were necessarily out of the scope of forward contracts were also erroneous.
Similarly, MCX aruged that there were contradictions in the CERCs findings when it held that the fortnight-ahead contracts and month-ahead contracts, as they became ready delivery contracts or non-transferable specific delivery contracts; could not be traded on MCX, without seeking approval from Commission. CERC chief Pramode Deo confirmed this development and told FE CERC is expected to release its order soon.
CERC had delivered its order in April 2009 on a petition filed by Power Exchange India which had pleaded that CERC should retrain MCX and Indian Energy Exchange from the introduction, sale, marketing in electricity forward contracts. They should also be restrained from introduction of any products -forward or any other contracts that involve dealing in, trading of and/or delivery of electricity without CERC's approval. CERC in its order observed that ) regulatory oversight to promote development of market in power is vested in this Commission (CERC) as mandated under Section 66 of the Electricity Act, 2003 and, therefore, the orders, norms issued by this Commission and the regulations framed would be binding on all concerned.
Further, CERC ruled that power exchanges approved by this Commission need not approach FMC for any approval for the reasons that the contracts traded or to be traded outside the scope of section 15 of the FMC (Regulation) Act, 1952.