Section 4 in Central Electricity Regulatory Commission (Power Market) Regulations, 2010
4.
These regulations shall apply to the following types of contracts -(i)Delivery based Short Term contracts in OTC market -(a)OTC Contracts directly between buyers and sellers -The interstate transactions in which buyers and sellers enter into a contract and decide price and other terms of the contract either through negotiation or based on competitive bidding processes.(b)OTC Contracts through Electricity Traders -I. Back to back deals - The interstate transaction in which an Electricity Trader buys a specific quantity of power for a particular duration from one party and simultaneously sells it to another party on same terms and conditions. Such transaction does not expose the trader to any price risk. It may expose the trader to credit risk and operational risk.II. Deals with Open position - The interstate transaction in which a Electricity Trader takes a position in a power purchase or sale contract based on price and other factors in view and adopts a strategy which he deems fitIllustration. - Electricity Trader A buys power for a long term period at a contracted price and sells power to buyers B, C, D in tranches over a period of time at different prices.III. Contract to aggregate suppliers / buyers and sell / buy to a one or more buyers / sellers(ii)Financially settled electricity derivatives contracts transacted in OTC market - It is a contract which derives its value from an underlying asset (e.g. day ahead electricity contract or other spot market contract or other reference index). The contract price is fixed at the time of transaction. The final financial settlement price is based on the spot price of the underlying asset or any other predefined reference index as agreed between the parties at the expiry of contract. These contracts can be Derivative Contracts, swap and other structured contracts etc.(iii)Delivery based contracts transacted on Exchange(a)Intraday contract /Contingency contract(b)Day Ahead contract(c)Term Ahead contract(d)[ Real Time Contract] [Added by Notification No. L-1/13/2010/CERC, dated 12.12.2019 (w.e.f. 20.1.2010).](iv)Financially settled electricity derivative contracts transacted on Exchange -It is a contract which derives its value from an underlying asset (e.g. day ahead electricity contract or other spot market contract or other reference index). The contract price is fixed at the time of transaction. The final financial settlement price is based on the spot price of the underlying asset at the expiry of contract.These contracts can be futures contract and other standardised contracts etc.(v)Any new contracts linked with electricity generated from renewable sources, e.g. Renewable Energy Certificates (REC), etc. transacted on Power Exchange.(vi)Any new contract in areas related to capacity , power price indices, and other areas related to electricity ;(vii)Capacity Contracts -These are contracts where the capacity of a generating station is booked in advance and consideration is paid by the buyer with the right to require the generator to despatch electricity as and when required by such buyer at any time during the tenure of the contract. These can be transacted both on OTC markets and /or on Exchanges .(viii)Ancillary Services Contracts - These contracts are for ancillary services. Ancillary Services in power system (or grid) operation are support services necessary to support the power system (or grid) operation for maintaining power quality, reliability and security of the grid, e.g. active power support for load following, reactive power support, black start, etc.
