Reliance Energy SPV Files For Power Trading Licence

Mumbai, July 30: | Updated: Jul 31 2003, 05:30am hrs
Reliance Energy Trading Private Ltd (RETPL), a special purpose vehicle (SPV) set up by Reliance Energy Ltd (REL), has filed an application with the Central Electricity Regulatory Commission (CERC) for an inter-state trading licence except in Jammu and Kashmir.

RETPLs move is a serious bid to tap emerging opportunities in power trading in the wake of the passage of Electricity Act (EA), 2003. REL chairman Anil Ambani had announced the companys move to enter power trading in a big way at the companys recent annual general meeting.

Mr Ambani had also hinted that REL would also like to play the role of marketer in the fast-changing power sector. RETPL is the second major applicant after the Power Trading Corporation (PTC) to seek an inter-state trading licence. Incidentally, Tata Power Company holds over 13 per cent equity in PTC.

Analysts termed the RETPL move as quite timely, as it would pave way for creating a power trading market in the country. PTC, which had traded 4,178 million units (MUs) in 2002-03 against its own target of 3,800 MUs, proposes to trade 6,150 MUs in 2003-04.

RETPL has submitted that as per clause 14 of the EA 2003, the Appropriate Commission may, on an application made to it under section 15, grant a licence to any person to transmit electricity as a transmission licensee, or to distribute electricity as a distribution licensee, or to undertake trading in electricity as an electricity trader in any area as may be specified in the licence.

As per clause 79 (a) of the Act, the CERC would issue licences to persons to function as a transmission licensee and electricity trader with respect to their inter-state operations.

The company has submitted that REL, until recently BSES Ltd, with its experience of over seven decades in the power sector, combined with the multi-industry and multi-functional experience of Reliance, has strong in-house experience and pool of expertise available - technical, commercial, legal and financial - to carry out the proposed trading activities efficiently and effectively.

With the enactment of the Act and recognition of trading as a distinct market activity, which is poised to develop into a full-fledged and vibrant power market in the country, RETPL shall strive to meet the needs of its customers by acting as a single window proving bundled services, the company said. RETPL has assured that it would adopt appropriate corporate governance and risk management strategies by letter of credit/payment deposits to meet any payment mismatches in the business of trading in electricity.