Petition of the CERC (Procedure, Terms and Conditions for grant of trading licence and other related matters) Regulations, for the grant of a Category V Inter-State Trading Licence – EQ
Summary:
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**Objective:** This is a final order from the CERC granting Greensure Trading Private Limited (GTPL) a licence to engage in inter-state trading of electricity across India. This licence is a regulatory requirement for any entity wishing to buy and sell electricity across state borders.
**Key Business Implications for the Licensee (GTPL):**
1. **Authorized to Trade:** The order formally permits GTPL to operate as an electricity trader in the inter-state market for a period of 25 years. This opens a significant revenue stream by allowing them to buy power from generators and sell it to distribution companies (DISCOMs) or other open access consumers.
2. **Regulated Profit Margins:** As a Category ‘V’ trader, GTPL’s profitability is directly constrained by the trading margin regulations. The order explicitly mandates that they must charge trading margins strictly in accordance with CERC’s regulations, which cap the profit per unit of electricity traded.
3. **Ongoing Compliance Burden:** The licence is subject to strict, ongoing conditions. GTPL must maintain a minimum net worth of ₹2 Crores and a current/liquidity ratio of 1:1 at all times. Failure to do so could lead to the revocation of the licence.
4. **Operational Restrictions:** GTPL is prohibited from engaging in the transmission of electricity. Its business must remain focused purely on trading. Furthermore, if it fails to undertake any trading activity within one year of receiving the licence, the licence is liable for revocation.
5. **Public and Regulatory Scrutiny:** The process involved public notices and no objections were received. However, GTPL is now subject to continuous reporting requirements and must pay an annual licence fee to the Commission.
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### Detailed Technical Summary
This document is the final, binding order from the CERC, detailing the rationale and conditions for granting the trading licence.
#### 1. Background and Application
– Greensure Trading Private Limited filed a petition under Section 14 of the Electricity Act, 2003, and relevant CERC regulations (2020) seeking a Category ‘V’ inter-state trading licence.
– Category ‘V’ is a classification for traders, and the specific regulations for this category set the minimum financial and professional requirements.
#### 2. Regulatory Compliance and Public Notice
– **Financial Eligibility:** In accordance with Regulation 3(3) of the Trading Licence Regulations, an applicant for a Category ‘V’ licence must have a net worth of ₹2 Crores and maintain a minimum current and liquidity ratio of 1:1. Based on GTPL’s audited balance sheet (as of 15.12.2025), the Commission confirmed that the company met these requirements.
– **Professional Staffing:** Regulation 3(2) requires at least one full-time professional with relevant experience. GTPL provided details of two professionals: Mr. N. Mageswaran (Director with 11 years of experience in business development and renewable power) and Mr. K. Prasanna (MBA with over 5 years of finance experience). This fulfilled the requirement.
– **Public Notices:**
– **First Notice (by Petitioner):** GTPL published notices in multiple newspapers on 27.12.2025 as required under Section 15(2) of the Act. No objections were received.
– **Second Notice (by CERC):** After a preliminary finding of eligibility, the Commission issued its own notice on 19.2.2026 under Section 15(5)(a), inviting further suggestions or objections. Again, none were received.
#### 3. Key Conditions of the Licence (as listed in Para 9 of the Order)
The licence is granted subject to several stringent conditions that GTPL must adhere to for its entire 25-year validity. The key conditions are:
– **Compliance:** Must comply with all provisions of the Electricity Act, CERC rules/regulations, and any orders/directions from the Commission.
– **Business Restriction:** Shall not engage in the business of transmission of electricity.
– **Trading Margin:** Must charge trading margins strictly as per the CERC Trading Licence Regulations.
– **Financial Health:** Must maintain the required net worth (₹2 Crores) and current & liquidity ratio (1:1) at all times.
– **Fees:** Must regularly pay the annual licence fee as per the CERC (Payment of Fees) Regulations.
– **”Use it or Lose it”:** If the licensee fails to undertake any trading activity within one year from the date of the licence, the licence is liable for revocation.
– **Reporting:** Must submit all required reports and information to the Commission.
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