PTC India violated trading margin norms

Written by Sanjay Jog | Mumbai | Updated: Dec 25 2008, 06:07am hrs
The Central Electricity Regulatory Commission (CERC) has observed that PTC India, the leading power trading company with a market share of over 60%, has violated the provisions of the trading margin regulations in as much as the power purchase agreements (PPAs) signed by it with the utilities in Eastern Region authorise it to collect trading margin exceeding 4 paise/kWh.

On examining the information furnished by PTC India, it transpired that service charge of 5 paise/kWh was recovered by the company for the power purchased from Chukha HEP and Kurichchu HEP in Bhutan. Thus, prima facie provisions of the trading margin regulations, which prescribe that the licensee shall not charge the trading margin exceeding 4 paise/kWh of the electricity traded including all charges, except the charges for scheduled energy, open access and transmission losses, were violated. Accordingly, CERC on an order dated September 1, directed PTC India to show cause as to why appropriate proceedings under the law should not be initiated for noncompliance of the trading margin regulations.

However, PTC India in its submission argued that the transactions being part of international trade, is within the exclusive jurisdiction of the Central government and outside the regulatory jurisdiction of the CERC.

On the other hand, , CERC said PTC India cannot charge trading margin exceeding 4 paise/kWh, irrespective of its source of purchase of power so long as its re-sale is within the territory of India. Authorisation to the respondent by the Central Government to charge transaction margin or service charges exceeding 4 paise/kWh, as claimed by the company, does not make any difference, since after the Electricity Act, 2003 came into force, regulation of trading margin is the statutory function of the commission.

Further, CERC ruled that PTC India cannot be absolved of its obligation under the law to comply with the trading margin regulations specified by CERC in exercise of its statutory powers.