Trading of Electricity in Industry
Trading has been described to mean the activity of purchase of electricity for resale thereof. It is being recognized as a distinct licensed activity along with the safeguard in which the Regulatory Commissions are being authorized to fix ceilings on trading margins, if essential. ERCs might specify technical and capital adequacy and creditworthiness thresholds for traders. Significant features of power trading are:
- Distribution licensees and Gencos could engage in trading;
- CTU, SLDC, STU,RLDC and NLDC cannot engage in trading; and
- ERCs are authorized to fix caps/ceilings on trading margins.
The price is not regulated for direct commercial relationship among the consumer and the generator or trader. Thus, the wheeling and subsidy surcharges are regulated.