trading regulation

Licensing of trading, Eligibility Criteria for Grant of Trading Licence, the Duties and the Terms and Conditions of Trading Licence, Regulation, 2005

In exercise of powers conferred by Section 181 (2) (b) read with Section 15 (1), Section 181 (2) (c) read with Section 15 (2), Section 181 (2) (d) read with Section 16, Section 181(2) (e) read with Section 18 (2) (a) and Section 181 (2) (f) read with Section 18 (2) (c), Section 181 (2) (z) read with section 52 and Section 181 (2) (zp) of the Electricity Act, 2003 (36 of 2003), and all other powers enabling in this behalf, the Haryana Electricity Regulatory Commission, hereby makes the following regulations namely: -

(i) These Regulations may be called the Haryana Electricity Regulatory Commission (Licensing of trading, Eligibility Criteria for Grant of Trading Licence, the Duties and the Terms and Conditions of Trading Licence) Regulation, 2005.

(ii) These Regulations shall apply to any person undertaking intra-state trading of electricity in the State of Haryana.

(iii) These Regulations shall come into force on the date of their publication in the Haryana Government Gazette.

(iv) The Punjab General Clauses Act 1898(1 of 1898), as applicable to the state of Haryana shall apply to the interpretation of these Regulations.

b) “Central Commission” means the Central Electricity Regulatory Commission referred to in sub-section (1) of Section 76 of the Act;

d) "Intra-state trading" means purchase of electricity for resale thereof by an electricity trader within the State of Haryana.

e) “Licence” means a licence granted under Section 14 of the Act to undertake trading in electricity within the territory of the state of Haryana.

f) “Licensee” means a person who has been granted a licence under Section 14 of the Act to undertake intra-state trading in electricity within the state of Haryana and includes a person deemed to be a licensee under Section 14 of the Act.

g) “Net worth” means sum total of paid up capital and free reserve (excluding revaluation reserves) less accumulated losses and deferred expenditure not written off;

i) All other expressions used herein but not specifically defined herein but defined in the Act shall have the meaning assigned to them in the Act. The other expressions used herein but not specifically defined in these regulations or in the Act but defined under the Haryana Electricity Reform Act, 1997 shall have the meaning assigned to them under the said Act, provided that such definitions in the Haryana Electricity Reform Act, 1997 are not inconsistent with the provisions of the Electricity Act, 2003.

(1) A person who has been granted a licence by the Central Electricity Regulatory Commission for inter-state trading shall not be required to take a licence under these regulations in respect of sale or purchase of electricity within the State of Haryana. However, such a licensee shall inform in writing as per Form –1 to the Commission about its intention to trade in the state of Haryana and also abide by the prevailing regulations / codes/ orders/ guidelines/ directions issued by the Commission from time to time.

(2) The inter-state trading licensee shall be liable to pay to the Commission an annual licence fee, same as applicable to the intra-state trading licensee, as specified in the Haryana Electricity Regulatory Commission (fee) Regulation, 2005 (Regulation No- HERC/10/2005) as amended from time to time.

(3) If inter-state trading licensee fails to either pay any fee under condition 3 (2) above or does not abide by the prevailing regulations / codes/ orders/ guidelines/ directions issued by the Commission from time to time, he shall not be allowed to continue trading in the State of Haryana.

(1) An application for the grant of Licence shall be made in Form-2 and that for seeking amendments to an existing licence shall be made in Form-3. The application shall be supported by an affidavit of the authorised person as prescribed under the HERC (Conduct of Business) Regulations 2004 (Regulation No- HERC/06/2004).

(2) An application under sub-regulation (1), signed by or on behalf of the applicant, shall be made in seven suitably bound copies (one original plus six photocopies) to the Secretary, Haryana Electricity Regulatory Commission.

(3) An application under sub-regulation (1) shall be accompanied by a non-refundable processing fee as specified in the Haryana Electricity Regulatory Commission (fee) Regulation, 2005 (Regulation No- HERC/10/2005) as amended from time to time. The amount of fee shall be remitted in the form of a demand draft drawn in favour of the Secretary, Haryana Electricity Regulatory Commission and payable at Panchkula. The State Government has prescribed such fee to be Rs. 1,00,000/-.

(4) The applicant shall also furnish his application along with its enclosures on a suitable digital media.

(a) a copy of the business plan covering a minimum period of 5 years, with statement of the proposed capital outlay in connection with the utility, means of financing the proposed capital expenditure and such other particulars as the Commission may require;

(b) in case an applicant is a company, society, Co-operative society, local authority or partnership concern:

i) a copy of the Memorandum and Articles of Association of the company or constitution of society or byelaws of the co-operative society or partnership deed (authorising the applicant to undertake the proposed licensed business) along with incorporation or registration proof,

ii) a copy of audited Annual Accounts for the last five years or for the period incorporated or registered, if less than five years,

iii) a copy of resolution passed by the company or society or co-operative society or local authority for making such application,

Provided no application for a licence shall be made by any local authority except pursuant to a resolution passed at a meeting of such authority held after one month's prior notice of the same duly specifying the purpose thereof and given in the manner in which notices of meetings of such local authority are usually given, and

(2) Any other document or information that the Commission may ask for by a specific/ general order or direction.

An application for amendment or alteration to terms and conditions of an existing licence shall:

(1) contain the existing provisions and proposed amendments to the licence and reasons thereof, and;

(2) be accompanied by documents mentioned in regulation 5 relevant to the amendments proposed , and;

(3) be accompanied by such fee as specified in the Haryana Electricity Regulatory Commission (fee) Regulation, 2005 (Regulation No.- HERC/10/2005) as amended from time to time.

1. On receipt of the application, the receiving Officer or any person authorised by the Commission shall note thereon the date of its receipt and shall send an acknowledgment to the applicant stating the date of receipt.

2. If on scrutiny, an application for grant of a licence is found to be incomplete or deficient in any manner, it shall be returned to the applicant for making a fresh application after completing it or removing the deficiencies. The applicant shall be advised in writing of any defects in their application and the time allowed to rectify them. The applicant shall follow the procedure laid down in regulation 4 in respect of his fresh application except that the application-processing fee will not be required to be paid again.

Provided that no application shall be refused for defect in its form or content, without giving an opportunity to the person filing it to rectify the same.

The Commission or any Officer designated for the purpose by the Commission may upon scrutiny of the application, require the applicant to furnish within a period to be specified, such additional information or particulars or documents as considered necessary for the purpose of processing the application.

If the Commission finds the application to be complete and accompanied by the requisite fee, information, particulars and documents and the applicant has complied with all the requirements for making the application and furnishing of information, particulars and documents, the Secretary or the Officer designated for the purpose shall certify that the application is ready for being admitted for grant of licence in accordance with applicable laws and communicate the same to the applicant within 15 days of receipt of complete information.

1. Within seven days from the date of receipt of communication of admission and numbering of the application under Regulation 9, the applicant shall publish a notice in Form-4 (in case of a new licence) or in Form-5 (in case of amendment in an existing licence) as applicable, in one issue each of a daily news paper in English language and one daily news paper in Hindi language having wide circulation in the state of Haryana.

2. In addition, such notice shall give the addresses of the offices at which copies of the draft licence may be inspected or purchased and shall state that every local authority, utility or person, desirous of making any representation / objection with reference to the application to the Commission, may do so as per the procedure prescribed in the HERC (conduct of Business) Regulation, 2004 within thirty days of the date of publication of the aforesaid notice.

3. The Commission may direct that notice of the application be served on the Central Government, the State Government, the local authority or any other authority or person or body.

4. Within one week of publication of the notice in newspapers under this regulation, the applicant shall intimate to the Commission the date of its publication and attach a copy of such notice as published in the newspaper.

1. If in the opinion of the Commission, it is in public interest to make certain amendment or alteration to an existing licence, it shall publish a notice in Form-6 in one issue each of a daily newspaper in English and one daily newspaper in Hindi language having wide circulation in the state of Haryana.

2. A copy of the notice shall also be served on the licensee for obtaining his consent to the amendment or alteration proposed by the Commission.

The applicant shall make available sufficient number of copies of his application for grant of a licence or for amendment of his licence, along with documents specified in Regulation 5 for inspection by any person in his own office(s) and in the office of the Commission, Electrical Inspector, Municipalities, Municipal corporations, Zila Parishad and such other authorities or local bodies, as the Commission may specify and furnish to persons applying for them the copies of such documents at a price not exceeding the normal photocopying charges or the price as specified in the notice. The licensee shall also place his application on his website, if any.

Any person intending to object to the grant of the licence or desiring any amendment in the proposed conditions of licence shall file objection within thirty days from the date of publication of the notice by the applicant. The objection shall be filed in the form of reply and as per the HERC (Conduct of Business) Regulations 2004 (Regulation No.- HERC/06/2004). The Commission shall consider all objections received within thirty days of the date of publication of notice under regulations 10 and/ or 11.

(1) If the applicant has duly arranged for the publication of the notice of the intended application and the time for filing of the objection is over, the Commission may proceed to set the application for regular hearing.

(2) The Commission shall give the notice of inquiry or hearing to the applicant, the persons, who had filed objections, the Central Government, the State Government, and to such other authority, person or body as the Commission considers appropriate.

(3) If any person objects to the grant of a licence applied for under the Act, the Commission may cause a local inquiry to be held unless the Commission is satisfied that the objection is of a frivolous or vexatious nature. Written notice of the enquiry shall be given to both the applicant and the objector.

(4) In case a local inquiry is held, a memorandum of the proceedings shall be prepared and signed by the applicant, the Officer or person appointed by the Commission to conduct the enquiry and such other person as the Commission may direct.

(5) The hearing on the application for grant or amendment of licence shall thereafter proceed in the same manner as provided in the HERC (Conduct of Business) Regulations 2004 (Regulation No.- HERC/06/2004).

(6) Where an objection is received from any local authority concerned, the Commission shall, if in its opinion the objection is insufficient, record in writing and communicate to such local authority its reasons for such opinion.

(1) Where the Commission after considering objections under regulation 13 proposes to issue a licence to the applicant, it shall serve a copy of notice in Form 7 along with a copy of the proposed licence to the applicant to convey his willingness to accept the licence, within one week of its service on him.

(2) On receipt of the willingness to accept the licence from the applicant, the Commission shall publish a notice in Form-7 stating the name and address of the person to whom the licence is proposed to be issued in one issue each of a daily newspaper in English and one daily newspaper in Hindi language having wide circulation in the area of trading of the proposed licence.

(3) After receiving an intimation in writing from the applicant that he is willing to accept the licence in the form approved by the Commission and after ascetaining that the applicant satisfies the conditions specified for the grant of the licence, the Commission shall issue the licence and shall direct the publication of the licence or such part or gist thereof as the Commission considers appropriate.

(4) As far as practicable, the Commission shall issue licence within 90 (ninety) days of receipt of an application under regulation 3 or within 90 (ninety) days of the completion of filing under regulation 9 whichever is later.

The Commission, as far as practicable, within ninety days of receipt of an application for grant of a licence may reject an application for reasons to be recorded in writing. However, no such application shall be rejected without giving an opportunity to the applicant of being heard by the Commission.

(1) The licence shall commence from such date as the Commission may specify in the licence.

(2) The licence shall continue to be in force for a period of twenty-five years unless revoked.

Every person, who is granted a licence, shall within thirty days of the grant thereof:

(b) make available a copy of such licence for public inspection at all working days at his head office and at his registered office if any, office of Commission and Electrical Inspector, and ;

(d) shall make necessary arrangements for the sale of printed copies of the licence to all persons applying for the same, at a price not exceeding Rs. 200/-, and;

(e) supply free of charge one copy of the licence to the State Government, the Central Electricity Authority, State Transmission Utility, transmission and distribution licensees and the State Load Dispatch Centre, Electrical Inspector, each of such Municipalities, Municipal corporations, Zila Parishad and such other authorities and local bodies as the Commission may specify, within the area of trading.

(1) Where, after considering objections under regulation 13 on the proposed amendment in the terms and conditions of the licence, the Commission is of the opinion that it is in public interest to do so, the Commission may make such alteration and amendment as it may think fit.

(2) Where alteration and amendment to the terms and conditions of an existing licence are proposed by the Commission, it may make such alteration and amendment as it may think fit after considering the objections under regulation 13.

(3) No alteration and amendment shall be made except with the consent of the licensee unless the Commission is of the opinion that such consent has been unreasonably withheld.

(4) Unless otherwise specified by the Commission in writing, the procedure specified in these regulations for grant of licence, in so far it can be applied, shall be followed while dealing with an application for amendment of the licence.

The provisions of regulation 18 shall apply mutatis-mutandis, to a licence amended under regulation 19.

In case the Commission issues a notice to the licensee for revocation of his licence under Section 19 of the Act, the Commission may send a copy of such notice to the SLDC as well as STU.

(1) The applicant shall have at least one full-time professional in each of the following disciplines having not less than 5 years experience, namely:

Provided that the minimum qualification for (i) above would be a graduate in Electrical Engineering and for (ii) it would be CA/ICWA.

(2) The technical requirement of staff shall be complied with before undertaking trading activities, notwithstanding the fact that the Commission has granted the licence for intra-state trading.

(3) The applicant shall furnish to the Commission the details, including their experience and knowledge of electricity industry, of the professional and the supporting staff engaged by him on full-time basis before undertaking intra-state trading.

(4) The applicant shall submit a synopsis of the senior management team including the Director(s) and relevance of their skills and experience in meeting the requirement of the licence, along with evidence of their ability to comply with the licence conditions.

(1) Considering the volume of intra-state trading proposed to be undertaken in a year, the net worth of the electricity trader at the time of application shall not be less than the amounts specified here under:

S.No.	Category	Annual Trading Volume (MU)	Maximum capacity (MW)	Networth (Rs. in Cr)
1.	A	Upto 100	Upto 25	2.00
2.	B	>100 and upto 200	>25 and upto 50	3.00
3.	C	>200 and upto 500	>50 and upto 100	7.50
4.	D	>500 and upto 700	>100 and upto 150	12.50
5.	E	>700 and upto 1000	>150 and upto 200	17.50
6.	F	>1000	>200	25.00

The applicable amount of net worth shall be determined on the basis of volume of trading in energy or capacity which ever is higher.

(2) If a licensee holds multiple intra-state / inter-state licences, and his trading volume exceeds the combined volume corresponding to the net worth required for such licences, he shall increase his net worth within a period of three months.

(3) A licensee shall increase his net worth within a period of three months if the volume of trade or maximum capacity at any stage in a financial year moves from a lower category to higher category and the licensee shall inform the Commission of his moving from one category to another and subsequent change in the net worth.

(4) The Commission may upon considering all relevant factors vary the requirement of net worth from time to time.

The terms and conditions of licence applicable to the Licensee with effect from the notified date shall be as set out in Form-8.

(1) by general or special order issue such directions as may be necessary or expedient for the purpose of removing difficulties arising in giving effect to any of the provisions of these regulations.

(2) in appropriate cases and for reasons to be recorded in writing relax any of the provisions of these regulations.

26. Subject to the provisions of the Act, the Commission may from time to time issue orders or directions to be followed in regard to the implementation of these regulations.

27. The Commission may, at any time add, modify, delete or amend any provision of these Regulations.

28. The proceedings for activities as above shall be held in accordance with the relevant provisions of the Act, these regulations and as provided under the Conduct of Business Regulations.

By order of the Commission
Sd/-
Secretary
Haryana Electricity Regulatory Commission