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| The emergence of power trading as a viable business venture has attracted a number of new players.
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| Reliance Energy Trading and Amalgamated Transpower have already applied with the Central Electricity Regulatory Commission (CERC) for trading licences.
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| Besides the two new applicants, Global Energy Ltd, another private player, has already initiated power trading between Goa and Delhi.
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| Till recently, trading was done solely by the Power Trading Corporation (PTC).
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| Increasingly, states like Delhi, Madhya Pradesh, Haryana and Uttar Pradesh are creating tradable buffers to ensure their energy security, while trading surplus power with other states when domestic demand is low.
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| While Reliance Trading has sought permission to trade in electricity in all states, except Jammu and Kashmir; Amalgamated Transpower, which has a paid-up capital of Rs 3 crore, is already negotiating with the governments of Sikkim, West Bengal, Orissa and Madhya Pradesh for a mandate to trade power.
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| The CERC is currently in the process of specifying the technical requirements, capital adequacy requirement and creditworthiness for undertaking inter-state trading in electricity.
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| However, since it will take time for the rules to be notified, CERC is simultaneously evaluating the applications of potential entrants as well.
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| Following the enactment of the Electricity Act, 2003, bilateral power trading between states has shot up. At present, states are trading more than 2,000 MW of power daily under bilateral contracts.
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| Since May this year, around 19 such contracts, involving the exchange of 2085 MW of power between 12 odd states, are being executed each day during pre-specified hours.
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| Delhi Transco Ltd has signed 9 contracts, involving the sale of 430 MW and purchase of 780 MW during pre-specified hours from mid-May to September.
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| The state electricity boards of Punjab, Uttar Pradesh, Haryana and West Bengal are also trading power. And more states are expected to negotiate bilateral power contracts to tide over their intra-day demand variations.
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| Under these contracts, the two parties strike a deal to buy or sell a particular quantity of power during a certain period of the day for a pre-specified period of time.
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These arrangements mean that instead of the prevalent practice of getting into
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