Tata Power Company has floated a special purpose vehicle (SPV) under the name of Tata Power Trading Company Private Limited (TPTCPL) for undertaking inter-state trading of power in the country. The new company, incorporated under the provisions of Companies Act, 1956, has recently made a fresh application to the Central Electricity Regulatory Commission (CERC) for grant of a trading licence for an initial trading capacity of 50-100 million units per annum during the first year of trading.

CERC had earlier rejected the application of the Tatas which was made in the name of Tata Power Company (TPC) on the ground that licences cannot be granted to third parties and the company which has to trade in power should first be incorporated. The order was passed in January this year by a two member bench comprising of chairman, CERC, AK Basu and its member KN Sinha.

TPTCPL is also exploring the opportunity of spot trading of temporary surpluses once the power trading exchange is formed.

Speaking to FE, Mr Basu said the Commission is now hearing the case of TPTCPL along with two others — Lanco group promoted Lanco Electric Utility Limited and Sumex Organics Private Limited — on March 16 for grant of inter-state trading licence.

Mr Basu said that CERC had received nine applications. The others include Reliance Energy Trading Private Limited, Adani Exports, DLF Limited, Power Trading Corporation (PTC), Ispat Energy and TGV Projects and Investments Private Limited. Three applications — TPTCPL, Lanco and Sumex which fulfill the criteria are being taken on March 16 while the others will be taken up by the regulator subsequently.

TPC has a generating base of around 2258 mw consisting of thermal, hydro and wind based generating stations in Maharashtra, Jharkhand and Karnatka. The surplus capacity available at all these locations will be used for trading activities by its subsidiary TPTCPL.

TPC also has a distribution base of around 8 lakh consumers and power demand of 1000 mw in Delhi through a stake in New Delhi Power Limited. It has a distribution licence in Mumbai city where the company caters 21,000 customers including bulk consumers like Railways and Bombay Port Trust. In Delhi, TPC owns a major stake in NDPL and distributes power in north and north-west Delhi.

With the option for multiple sourcing of power, as provided by the Electricity Act 2003, TPTCPL feels that there is a huge scope for supplying power to this area through trading activity. "At present, Eastern India is in a power surplus position while rest of the country is facing shortages. This imbalance provides an excellent window of opportunity for power trading through back-to-back contacts", says TPTCPL in its application to CERC for for grant of trading licence.

In its application, Lanco Electric Utility Limited has proposed to have trading volumes of around 100 million kwh per annum during the first year of trading and 1000 million kwh per annum during susequent five years of operation. Initially trading area would be confined to Andhra Pradesh to effect savings in wheelin charges and later would be extended to whole of India except Jammu and Kashmir.

The Rs 800-crore Lanco group has set up a 368 mw Kondapalli power project in Andhra Pradesh. Various other projects are at various stages of implementation with a plan to add 1000 mw capacity. Sumex Organics Private Limited, the other applicant, is in the business of trading and distributing petroleum products like fuel oil, solvent, coal etc to various power utilities.