Delhi Electricity Regulatory Commission (Intra-state Electricity Trader) Regulations, 2005

~~. m.~.-33002/99 , 1\\ ..I, \ i I'._./ REGISTERED No. D.L.-33002l99 3mT~ EXTRAORDINARY PUBLISHED BY AUTHORITY No. 13) 'IWT-JV PART-IV GOVERNMENT OF THE NATIONAL CAPITAL TERRITORY OF DELIII ~~( I )/~f<:Mm m~ NOTIFICATION Delhi, the 23rd January, 2006 No. 5/72/200SIHP-IIEstt.l359.- In pursuance of the provisions of sub-sections (1) of Section 3 read with clause (i) of Section 2 of the Private Security Agencies (Regulation) Act, 2005 (29 of 2005), the Lt. Govemorofthe National Capital Territory ofDelhl is pleased to designate the 10int Commissioner of Police (Headquarters), Delhi to be Controlling Authority for the purpose ofthe said Act, in the National Capital Territory of Delhi, with immediate eITect. By Order and in the Name of the Lt. Governor of the National Capital Territory ofDelhi_ 1. 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(;~: -I'; DELHI ELECnUCI1Y REGUIA TORY COMMISSION NOTIFICATION Delhi, the 23rd January, 2006 No. F. 8 (19)/DERC/2005-06/3634.-Ill exercise of the powers conferred by Section 52 read with Section 181 oftbe Elect.ricity Act 2003 (36 of2003), the Delhi Electricity Regulatory COmmission hereby makes the following Regulations providing for the eligibility criteria for grant of trading licence and th~ duties of the electricity trader, namely:- 1. Shorttitle, extent and commencement:- (1)These Regulations may Regulatory Commission be called the Delhi Electricity (Intra-state Electricity Trader) (2) TheseRegulations shallapply to any person undertaking intra- state trading of electricity ih the National Capital Territory of Delhi. (3) TheseRegulations shall come into force from the date of their publication in the official gazette. 2. Definitions:- (1) In these Regulations,unlessthe context otherwise requires: (a) "Act" means the Electricity Act, 2003 (36 of 2003); (0) "opplicant" meons a person who has made on application to the Commission for grant of licence for intra-siole lfading of elec1ricity; (cl "Commission" means the Delhi Electricity Regulatory Commission; (d) "customer" means any buyer purchasing electricity from the trader; (e) "intra-state trading" means trading in electricity within the territory of the National Capital Territoryof Delhi by an electricity trader; (f) "trading licence" means a licence granted under Section 14of the Act to undertake intra-state trading in electricity as an electricity trader; (g) "licensee" means a person "",ho has. been granted a Trading Licence; (h) "net worth" means the sum total of paid up capital arid free reserves,but shall not include reservescreated out of revaluation of assets, write back of depreciation provisionsand amalgamation. (i) ."other business" means any business of the trading ncensee other than the licensed business·of intra-state trading; (2)The words· and expressionsused and not defined in these Regulations but. defined in the Act shall have the same meanings as assignedto them in the Act. 3. Technical Requirementsto Qualify as an Electricity Trader:- (1) The applicant for trading licence shall have the technical capability and resources and capabilities adequate to manage the intended volume of intra-state trade.- (2)The Commissionmay from time to time by general or special order decide on the technical capabilities to be maintained (3) The Applicant shall have at least one person with <qualification in engineering and a minimt_!'1 of 10 years experience in electricity industryto comply Willi the technical requirements for discharging the functions of the Electricity Trader. (4) The Electricity Trader shall maintain the technical capability and resources as directed by the Commission and provide the Commission with the details of any changes thereon and justify that the capability is adequately maintained to cater to the volume of trade undertaken by him. 4. Financial requirements to qualify as an electricity trader: _ (1) The applicant shall declare to the Commission the maximum trading volume the applicant proposes to handle in a year and its future plans of trading during the initial three years. (2) Capital adequacy requirement and credifworfhiness:- Considering the volume of intra-state trading proposed to be undertaken, the net worth of the electricity trader at the time of application shall not be less than the amounts specified hereunder:- S. Category Volume of Electricity Networth NO of the proposed to be (Rupees Trading traded (in Kilo-Watt In lakh) Licence Hours) per year. 1. A Up to ten million Fifteen 2. B Ten to tVventy million Thirty 3. C Twenty to fifty million Seventy five 4. 0 Fiftyto seventy One million hundred I 5. E Seventy to one One hundred million hundred I fifty. I 6 F One hundred to two Two l hundred million hundred Provk~0d that in case where the Trading volume reaches reyond two hundred million Kilo-Watt Hours per year, the capital adequacy and the credit worthiness for such trader shall be decided by the Commission, by general or special Order, as and when required. (3) The trader shall make reasonable endeavours to maintain investment grade credit rarii;0 from an independent Credit Roting ;'\gency throughout 111::-' period of the Licence. l~----------_.-- (4) In case the volume of trade moves, at any stage, from lower category to higher category, the Licensee shall increase his net worth within a period of thirty days of such transition and shall pay the differential licensee fee to the Commissionand the licensee shall informthe Commissionof such transitionand subsequentchange in the net worth within thirty days. 5. Exemption to deemed IiGensee:- Notwithstanding anything contained in regulation 4, the Deemed DistributionLicensees,under section 14 of the Act, would be entitled to undertake intra-state trading in electricity and shall not be required to have the technical or financial requirements including the capital adequacy norms and the credit worthinessas determined in the said Regulations. Provided that the Commission may under the proviso to section 16 of the Act, lay down general or special conditions, which such, deemed licensee,shall be required to comply, to continue the activitiesof an electricity trader. 6. Procedure for grant of licence for intra-state trading (1) Procedure for grant of license as laid down by the Act, shall be applicable for grant of intra-state trading licensesand all proceedings under these regUlations, to be conducted by the Commission, shall be governed by its Delhi Electricity Regulatory Commission (Conduct of Business)Regulations (2) Th'e application for grant of licence for intra-state trading shall be made to the Commission in the manner specified under these regulations, in the Form-I appended to these" regUlations, (verified by an affidavit), and shall be accompanied by such fee as may be prescribed by the state Government: Provided that till such time the fee is prescribed by the state Government the application for grant of licence for intra- state trading shall be accompanied by a fee of Rupeesone Lakh only payable through Bank Draft/Pay "Jrder drawn in favour of Secretary, Delhi Electricity Regulc AY Commission, New Delhi, and th"efee so paid shall be subject to adjustment as and when the fee isprescribed by the State Government. (3) The applicant, who has made the application for grant of license shall, within 7 days· after making such application, publish a notice of hisapplication, with such particulars and in such manner, as may be decided by the Commission. 7. Payment of licence fee (1)The Licensee shall pay to the Commission the annual licence fee of the amount specified hereunder, payable by means of a demand draft or pay order drawn in favour of Secretary, Delhi Electricity RegulatoryCommission,New Delhi SI. Category Volume of Licence fee No. Electricity (In Rupees) proposed to be traded per annum (in Kilo- Watt Hours) 1 A upto ten million Fifteen thousand 2 B Ten-to twenty Thirty million thousand 3 C Twenty to fifty Seventy million thousand 4 D Fiftyto seventy One lakh million 5 E Seventy to one One lakh fifty hundred million thousand 6 F One hundred to Two lakh two hundred million Provided that for a part of the year, the licence fee shall be payable pro rata on the basisof number of days: Provided further that the licence fee calculated on pro rata basis for a part of the year, shall·be rounded off to nearest hundred Rupees: Provided also that in case where the trading volume reaches beyond two hundred million Kilo-Watt Hours per year, the license fee shall be decided by the Commission, by general or special order, as and when required. (2)The licence fee shall be paid by the 15th April of each year, and in case the trader has moved from a lower category to a higher category, the balance of licence fee shall be paid within thirty days of such transition. (3) In case licensee moves from a higher category to lower category, license fee ~,hallnot be refunded to the licensee. (6) Notwithstanding the liability of the licensee to pay the late payment surcharge as aforesaid, the delay in payment of licence fee or a part thereof, beyond aforesaid period shall be construed as breach of the terms and conditions of the licence and the licence shall be liable to be revoked. (4) The licence fee shaJI be paid within thirty days of issue of licence. (5) In case the licensee fails to pay the licence fee or a part thereof, for a period of three months, the licensee sha!1 be liable to pay late payment surcharge on the outstanding amount at the rate of one percent of the licence fee payable per month or a part of the month, for the period the licence fee or any part thereof remains unpaid. 8. Standards of performance (2) Notwithstanding the above, the licensee shall furnish the performance details on a quarterly basis to the Commission in the format prescribed in Form-II and Form III appended to these regUlations, by 15th day of end of each quarter. (1) The, Commission may, after consultation with the licensee(s}, determine the sfandards of performance of the licensee or class of licensees. 9. Obligation of on Electricity Trader:- The Licensee shall, (1) comply with the requirements, of lows in force and, in particular, the Act, the rules and the reguic1ions, Grid Code and the orders and direclions issued bV the ·,.:)mmission, trom iime to t;me; (2) be subject to the trading marg'insfor the intra-state trading as fixed by the Commission, frorr time to time; (3) be governed by the technical requirements, capital adequacy requirements and creditworthiness determined by the Commission in these regulations for being an electricity trader and shall upgrade these technical and capital adequacy requirements, including staff, when the volume of trading increases; (4) establish adequate ,communication facilities like telephone, fax, computer, Internet facilities, before undertaking trading; (5) coordinate with State Load Dispatch Centre and State TransmissionUtilitywith regard to all trading-related activities; (6) render all assistance to any person authorised by the Commissionfor carrying out hisduties relating to the license; (7)carry out the trading bilaterally between the parties by entering into appropriate contracts. Necessary safeguards with regard to supply of electricity through trading, or payment for the electricity traded shall be included in the agreements between the parties. All trading arrangements shall be done through Lettersof credit or with any other superiorinstrument; (8) pay the licence fee in accordance with the time schedule as laid down in these Regulations; (9) not omit or neglect to undertake trading activity for four consecutive quarters; (10) not enter into any agreement leading to abuse of his dominant positionor enter into a combination which islikely to cause an adverse effect on competition in electricity industry; (11)maintain up-to-date record of his customers and the transactionsundertaken by himwith other parties. 10. Compliances and Information Submission:- (1)The ElectricityTrader shall duly comply with the provisionsof the Act. rules, regulations, Codes and the orders and directives ot the Commission, payment of cross subsidy 22 DELHI GAZETrE:EXTRAORDfNARY ==~======================surcharge and Supply Code and furnishthe information which the Commission may require from time to time; (2)The Electricity Trader shall maintain accounts for its intra-state trading businessseparate and independent of Other Business. The Electricity Trader shall prepare the accounts in accordance with the guidelines issued by the Commission; and till such time these guidelines are issued by the Commission, the accounts 'Shall be maintained in accordance with the provisionsof the Companies Act. 1956. 11. Prohibitions:- (1)The Electricity Trader shall not engage in the business of transmissionof electricity. '(2)The.Electricity Trader shall not. without prior approval of the Commission: (a) acquire by purchase or takeover or othervvise,the utility of any other Licensee; or (b) merge hisutility with the utilityof any other Licensee,or (c) assign or tronsfer his licence to any person, by sale, lease, (d) engage in any other business including distribution or generation of electricity. Provided that the clause (d), shall not be applicable to Distribution Licensees and Generating Companies already engaged in the businessof trading. (3)Wherever prior approval of the Commission is required, the Electricity trader shall file an appropriate application before the Commission, in accordance with the Delhi Electricity Regulatory Commission (Conduct of Business)Regulations 12. Prudential reporting:- (1)The Licensee shall, as soon as practicabie. report to the Commission:- (a) any significant change in the circumstance which may affect the licensee's ability to meet hisobligations under the Act the rules and the regulations and the directions and order issued by the Commission, the State Grid Code, the Agreements or the License'; (b) any material breach of the provisionof the Act. the rules and the regulations and the directive and orders issued by the Commission, the State Grid Code, the Agreements or the (cJ any major change in shareholding pattern, ownership nr management of the licensee. 13. Amendmentof license:- (1) The terms and conditions of the license may be modified by the Commission in public interest or on an application made by the licensee. (2)The procedure as laid down in section 18 of the Act, shall be applicable for any alteration or modification to the terms and conditions of the license. 14. Revocationof licence: - (1) The Commission after making an enquiry, is satisfied that the public interest so require, it may revoke the license of the Electricity trader for the grounds and as per the procedure stipulated in section 19 of the Act, and also; a) where Licensee has failed or neglected to undertake trading in electricity for four consequent quarters. b)when the Licensee makes on application for revocation of the , license and the Commission is satisfiedthat public interest so requires, the Commissionmay revoke hjslicense,on such terms and conditions as it thinksfit, Provided further that the Commissionmay, instead of revoking a license under tllis Regulation, permit the license to remain in force subject to such further termsand conditions os it thinks fit to irnpose, and any further tern-Isand conditions so imposed sha!1be binding upon and be observed by the Licensee and shall be 0f like force and effect as if they were contained in the license. 15. Penalties and orders for compliance: - In accordance with section 142 of the Act, the Commissionmay impose penalty on the Licensees and may issue orders for compliance for contravention of any provisions of the Act, Rules, and Regulations. 16 Issue of orders and practice directions: - Subject ,to the provisionsof the Electricity Act, 2003 and these regulations, the Commission may, from time to time,! issue orders and practice directions in regard to the implemehtation of these Regulations and procedure to be followed and various matters, which the Commission has been empowered by these regulations to direct, and matters incidental or ancillary thereto. 17 Power to remove difficulties: - If any difficulty arisesin giving effect to any of the provisions of these regulations, the Commission may, by general or special order, do or undertake or direct the Licenseesto do or undertake things, which in the opinion of the Commission is necessary or expedient for the purposeof removing the difficulties. 18. Powerto Amend: - The·Commissionmay, at any time add, vary, alter or modify anyprovisionsof theseregulationsby amendment. 19: Proceedingsfor inquiries,investigations,etc. All inquiries, investigations, adjudication under these regulations shall be done by the Commission through proceeding(s) as per the provisionsof DERC (Conduct of SOMIT DASGUPTA, Sec,. SANDEEP kUMAR, Add!. Secy. (power) (See regulation 6(2)} Delhi Electricity Regulatory Commission (Intia-state Electricity Trader) Regulations, 2005 Application form for grant of Trading licence Pmilculars of the Applicant 1. t-lame of the applicant 2. l6..ddress of the Registered office 3. Name, designation & address of the contact person 4. Contact Tel. Nos. 5. Fax No. 6. E-mail 10 7. Place of incorporation/registration 8. Year of incorporation/registration 9. category for which the license is being applied: 10. Following documents are to be enclosed (a) Certificate of registration (b) Certificate of commencement of business (c) Original power of attorney of the signatory to commit the cppiicant or its promoter (d) Details of Income Tax Regist:-otion Detclls or Financial Dcto of Applicant 1\ _ I'\)c:! worth (in equivalent Ind!o!! Rupees-conversion io l~,,~_-Liu: It:: c; lhe rote of exchange prevcii;ng at the end of eoch yeD,) lor opplicoblc) (OD/MM/YY) to (DD/MM/YY) In Home Exchange Currency rate used in equivalent indian Rs. 0) Year1 ( to f) Copies of Annual Reports or certified audited results to be enclosed in support of above 12. Annua! Turnover (in equivalent Indian Rupees - conversion to be done at the rate of exchange prevailing at the end of each year) for immediate past five financial years (Specify financial year as applicable) (OD/MM/YY) to (DD/MM/YY) In Home Exchange !n Currency rate used equivalent Indian Rs. oj Yearl ( to (a) {b} (c) (d) f) Copies of Annual Reports or certified audited results to be enclosed in support of above 13. List of documents enclosed in support of SI. Nos. (ll) and (12) above: Name of the document 14. oj Whether applicant himself shall be financing the proposed trading fully on its own balance sheet? b) If yes, proposed equity from the applicant i) Amount ii) Percentage 15. In case the applicant proposes to tie up with some other Agency for equity, then name & address of such agency aJ Name, designation & address of reference person of the other agency b) Contact Tel. No. c) Fax No. e) Proposed equITy from the other agency i) Amount ii) Percentage of total equity iii) Currency in which the equity is proposed f) Consent letter of 1he other agency to associate with the applicant for equity participation to be enclosed g) Nature of proposed tie-up between applicant and the other agency : 16. Details of debt proposed for the Trader activity 0) Details of Lenders b) Amount to be sourced from various lenders c) Letters from the lenders in support of the above to be enclosed 17. Organisational & Manageria! Capability of App!icant: (Applicant is required 10 C'nclosed proof of ihei;' Orgonisational 8.- Managerial Capability, ii 1 te' ['ns of these Regu!cr:ons, in form of proposeci organisational struciure and curricuic: '/f(le of various .2..c->->-g>.o ..cO -D. 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