DETERMINATION OF FEE AND CHARGES PAYABLE UNDER REGULATION 12 OF THE CENTRAL ELECTRICITY REGULATORY COMMISSION (TERMS AND CONDITIONS FOR DEALING IN ENERGY SAVINGS CERTIFICATES) REGULATIONS, 2016:

In a recent order dated 24.03.2017, the apex electricity regulator CERC has finalised the fees and charges payable by the Designated consumers to the registry for the purpose of meeting the cost and expenses towards the management of registry and software platform.


The fees and charges determined through this order may be applicable upto Financial Year 2019-20  or as may be determined by the CERC in consultation with Registry and the Administrator


The Fees & charges applicable are tabled below:

 

With this, the only thing remaining to be approved are the exchange rules and charges for trading. Once that is done, all the procedural aspects to enable ESCerts trading will be completed. We expect trading to start sometime in the second half of April.


The link to the order can be found here.

APPROVAL OF PROCEDURES FOR TRANSACTIONS of ESCERTS:

The trading of ESCerts is going to start soon as CERC has come up with new regulations on ESCerts which facilitates their transition from one eligible entity to another. ESCerts come under the Perform, Achieve and Trade (PAT) scheme which is a market based mechanism where ESCerts are issued on over achieving targets and they have to be purchased by underachievers to meet their compliance.

ESCerts have been issued to many designated consumers in February and the first PAT cycle took place in March 2015.

Registration of designated consumers is as per the instructions written in the CERC report on detailed procedure for registration of designated consumer with registry as Eligible Entity on 14th February 2017.

Procedure:

The procedure is applicable to designated consumers:

ESC registration procedure follows the following steps:

  • Registry through PAT-Net PORTALis the forum at which application of registration takes place. Application shall be in electronic and paper form.

  • Within seven days, the registry shall provide a unique ID and seek clarifications if any.

  • This application shall be accessed on the basis of eight criterions

  • If payment of charges and fees has been done, the registry will issue a certificate of Registration.

The issuance of ESCerts shall be done by the Ministry of Power (MoP) and registry will complete the verification of the same on the basis of Dynamic- Customer Relationship Management.

The following are the features of the ESCerts issued:

  • The ESCerts will be issued in electronic form

  • ESCerts that have been issued in a cycle period shall stay valid till the completion of compliance period of their next PAT cycle unless otherwise revoked prior to such validity period in pursuance of conditions for revocation.

  • In case if ESCerts are purchased by designated consumers, they shall remain valid till the completion of compliance period of next PAT cycle or until the submission to administrators.

  • Bilateral trading within the same corporate group is not permitted and accordingly, inter-sector self retention and transfer of ESCerts is not permitted.

  •  Trading of ESCerts- A separate Dynamic-Customer Relationship management (D-CRM) will be developed and maintained by Administrator.

Fees and Charges:

All designated consumers applying to become “Eligible Entity” shall pay the fees & charges (as

notified by commission from time to time) towards the following:

(i) One Time Registration Fee

(ii) ESCerts Fee to be paid by Designate Consumers to whom ESCerts are issued have

been issued by Ministry of Power.

The regulation can be accessed here.

THE COUNTRY SEES HIGH SAVINGS THANKS TO ENERGY SAVING SCHEMES:

An article in the Business Line quoted that savings of Rs 37,685 Cr have been brought about in the country because of BEEs (Bureau of Energy Efficiency) ‘Perform, achieve and trade PAT’ scheme. In the first cycle of the scheme, or PAT-I, 478 DCs (designated consumers) from 8 sectors invested Rs 21,517 crore. For the second cycle of the scheme, BEE has names 621 DCs from 11 sectors. The consumption is expected to be tighter in this cycle.

As per Chetan Adhikari, Vice-president of REConnect Energy, the supply of RECs is going to be very high, supply of 38 lack certificates as opposed to demand of just 14 lack. In his opinion, the price of the certificates is going to range between Rs 1,226 and Rs 3,464 a certificate (This value has been given on the basis of a detailed analysis of the prices at which ESCerts will be traded in Newsletter 61)

He also had the following view about it “Many DCs are likely to ‘bank’ their ESCerts and carry them over to the second cycle. This will help them set off against any shortfall in meeting the consumption norms. Conversely if the prices fall steeply, DCs might find it cheaper to buy the certificates rather than invest in energy efficiency.”

A detailed analysis of the PAT scheme has been done by REConnect in one off it’s blog.

CERC (Terms and Conditions for Dealing in Energy Savings Certificates) Regulations, 2016

CERC recently came up with its final regulation on Terms and Conditions for dealing in Energy Saving Certificates. This regulation will govern and define the framework for ESCerts trading on power exchanges. A brief analysis is given below:

Final regulation

The final Regulations have defined responsibilities of the Registry and Administrator. The responsibilities defined for POSOCO and CERC are same as the draft regulation

Registry

The functions of the Registry shall be

  • Registration of Eligible Entity.
  • Maintaining records of ESCerts viz., issuance, dealing, etc.
  • Dissemination of information in coordination with the Bureau.
  • Assistance in development of IT Platform for maintaining database of ESCerts.
  • Signing of Non Disclosure Agreement with the Administrator.

Administrator

The Bureau of Energy Efficiency shall act as the Administrator and shall define detailed procedure for the following

  • Interface activities between Power Exchanges and Registry, Administrator and Registry and Registry and Designated Consumer
  • Registration of eligible entities
  • Dealing, transfer and other residual matters.

 

Dealing ESCerts:

  • The ESCerts issued will be placed for dealing in any of the Power Exchanges by the ESCerts holder as per the PAT rules and these regulations.
  •  The frequency of transaction of ESCerts, through Power Exchanges, shall be on monthly basis or in such periodicity as per the procedure approved by the Commission.
  • The Registry shall cross-check the cumulative sale bids placed on Power Exchanges with availability of ESCerts in respective Registry accounts and in case of breach such eligible entities will be treated as defaulter.
  • Eligible entities with more than three cases of default in a cycle shall be barred from transaction of ESCerts for next six months, notwithstanding any penalty due to be imposed.
  • The denomination of one ESCert shall be equal to energy consumed in terms of one metric Ton of Oil Equivalent (mtoe).
  •  The market price of ESCerts shall be as discovered through the process of bidding at the respective Power Exchange.

 

The final regulation can be accessed here.

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