Electricity will now be traded as other commodities with forward contracts and derivatives on exchanges as the government issued an order permitting this, a move experts say can transform power contracting in India.
The power ministry issued the order on July 10 after consulting the Solicitor General on a decade-long jurisdictional spat between power regulator Central Electricity Regulatory Commission (CERC) and the Securities & Exchange Board of India (Sebi). The two regulators had earlier agreed to mutually settle the issue. The order is subject to a verdict by the Supreme Court that will hear the matter on August 28.
Sources said delivery-based long-term contracts are likely to be traded on power exchanges under CERC’s jurisdiction, while the derivative contracts are likely to be traded on commodity exchanges under Sebi.
Govt allows electricity derivatives, forward contracts
