Commission Says Applicant Meets Net Worth, Liquidity And Professional Experience Requirements Under Trading Licence Regulations
New Delhi, June 21: The Central Electricity Regulatory Commission has granted a Category ‘V’ inter-State electricity trading licence to PRMK Energy, allowing it to undertake inter-State trading in electricity across India.
A coram comprising Chairperson Jishnu Barua and Members Ramesh Babu V., Harish Dudani and Ravinder Singh Dhillon passed the order on an application filed by PRMK Energy under Sections 14 and 15 of the Electricity Act, 2003, read with the CERC Trading Licence Regulations, 2020.
PRMK Energy is a sole proprietorship firm registered on 17 May 2022 and had approached the Commission seeking grant of a Category ‘V’ trading licence for inter-State electricity trading.
Public Notices Issued, No Objections Received
As required under Section 15 of the Electricity Act and the Trading Licence Regulations, the applicant published public notices in several newspapers, including the all-India edition of Business Standard and other regional newspapers.
The applicant informed the Commission that no objections were received in response to the public notices.
Thereafter, pursuant to the Commission’s earlier order dated 3 June 2026 proposing to grant the licence, a further notice was published in Indian Express and Hindustan on 9 June 2026. No suggestions or objections were received in response to the Commission’s notice as well.
Financial Eligibility Examined
The Commission noted that under Regulation 3(3) of the Trading Licence Regulations, an applicant seeking a Category ‘V’ trading licence is required to have a net worth of ₹2 crore and must maintain minimum current ratio and liquidity ratio of 1:1 as on the date of the audited special balance sheet accompanying the application.
On examining the audited balance sheet submitted by PRMK Energy as on 8 March 2025, the Commission found that the applicant possessed the required net worth, current ratio and liquidity ratio for grant of a Category ‘V’ trading licence.
The Commission had earlier, by order dated 3 June 2026, recorded that the applicant was prima facie qualified for grant of the licence.
Professional Experience Requirement Also Satisfied
The Commission also examined whether the applicant fulfilled the requirement of having at least one full-time professional with qualifications and experience in power system operation and commercial aspects of power transfer, including finance, commerce and accounts.
PRMK Energy placed details of its professionals before the Commission. These included personnel with experience in business development, regulatory matters, open access, power sector operations, renewable energy, financial management, auditing, taxation and compliance.
After considering the material placed on record, the Commission held that the applicant fulfilled the professional experience requirement under the Trading Licence Regulations.
Licence Granted Subject To Conditions
The Commission allowed the petition and granted Category ‘V’ inter-State trading licence to PRMK Energy.
However, the licence has been made subject to several continuing conditions. The licensee is required to comply with the Electricity Act, rules, regulations, CERC orders and directions, and all applicable laws during the subsistence of the licence.
The Commission also directed that PRMK Energy shall not engage in the business of transmission of electricity during the period of the trading licence.
The licensee must charge trading margin strictly in accordance with the Trading Licence Regulations and maintain the prescribed net worth, current ratio and liquidity ratio at all times.
Licence May Be Revoked For Non-Compliance
The Commission clarified that non-compliance with the Electricity Act, rules, regulations or Trading Licence Regulations would make the licence liable for revocation.
It further directed that if PRMK Energy fails to undertake trading in electricity within one year from the date of the licence, the licence shall be liable to be revoked in accordance with law.
The licensee has also been directed to regularly pay annual licence fee and submit all reports or information required under CERC regulations or directions.
Order To Be Sent To Central Government And CEA
In terms of Section 15(7) of the Electricity Act, the Commission directed that an extract of the order be sent to the Ministry of Power and the Central Electricity Authority for information and record.
Key Takeaway
The order reflects CERC’s approach in assessing electricity trading licence applications on the basis of statutory eligibility, financial strength, liquidity, professional experience and absence of public objections. While the licence permits PRMK Energy to undertake inter-State electricity trading, the Commission has imposed continuing compliance obligations, including maintenance of financial ratios, adherence to trading margin norms and commencement of trading activity within one year.