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FAQ – Transaction of ESCerts

Ques 1: Who are the Sellers?

Ans: Those Designated Consumers (DCs) to whom Energy Saving Certificates (ESCerts) have been issued in their respective Perform Achieve and Trade (PAT) Cycle ( see clause 2.2.1 or the Procedure)

Ques 2: Who are the Buyers?

Ans: Those DCs who have been entitled to purchase ESCerts by Ministry of Power(MoP) are the buyers. ( see clause 2.2.2 of the Procedure)

Ques 3: How to become an Eligible Entity?

Ans: a) All the DCs to whom MoP has issued or entitled to purchase ESCerts, have to get themselves registered with POSOCO for becoming eligible entities (as defined in clause 2.2 of the Procedure) to participate in trading/transaction of ESCerts.

b) DCs can fill up the registration form through login ID of ‘Plant Head’ in PATNet portal. However, hard copies of registration form along with Annexures are required to be submitted to Registry (POSOCO).

c) The checklist for registration application is available in Annexure-A of the Procedure for transaction of ESCerts.

d) The procedure for submission of documents to the Registry is explained in the Annexure-B of the Procedure for transaction of ESCerts.

Ques 4: Who will inform the date of opening of Registration and date of commencement of trading of ESCerts?

Ans: Bureau of Energy Efficiency (BEE) being the Administrator shall inform the date of opening of Registration to all DCs along with the fee detils. The date of trading of ESCerts commencement shall also be informed by Administrator.

Ques 5: What does the Designated Consumer (DC) has to pay to become an Eligible Entity?

Ans: On 24th March 2017, CERC has approved the Fee order for transaction of ESCerts, with the following details:

a) One time Registration Fee of INR 15,000/- per application. However, DCs are exempted to pay registration fee will 31st December 2017, as per the revised fee rder by CERC.

b) The Eligible Entities who have been issued ESCerts, shall pay an ESCerts Fee at the rate of Rs. 5/- per ESCert.

c) The taxes and duties on fees & charges shall be applicable as per the prevailing norms.

Ques 6: What is mode of payment for fee?

Ans: All payment to Registry shall be done only through ESC and no draft/cheque will be accepted. Transaction ID of RTGS/NEFT has to be provided in the application form to become an eligible entity. Bank account details shall be provided to the DCs separately.

Ques 7: What quantity of ESCerts a seller can sell?

Ans: Sellers can sell the ESCerts issued to them by MoP in their respective PAT cycle at any of the exchanges. However, bids placed by them at both the exchanges should not be more than the quantity of ESCerts issued to them by MoP i.e. available ESCerts for transaction in their Registry account (see clause 14.4 4(b)) at any point of time.

Ques 8: What quantity of ESCerts a buyer can buy?

Ans: Buyers can purchase ESCerts beyong their compliance in respective PAT Cycle (see clause 14.4 step 4(c)). However, it may be noted that ESCerts once purchased cannot be resold (see clause 2.4 of the Procedure).

Ques 9: What will happen to the balanced ESCerts in an account of a Designated Consumer (DC)?

Ans: As per PAT Rules, amended in March 2016, Rule no. 12(6) and 13 (2), the DCs may use balanced energy saving certificates after the compliance, if any, for the purpose of banking and such banked ESCerts may be used for the compliance of their next cycle or sell to any other DC for the compliance within the validity period. The validity period for ESCerts issued during current cycle is till the completion of th compliance period of respective DC’s next cycle. However, it may be noted that ESCerts once purchased cannot be resold (see clause 2.4 of the Procedure).

Ques 10: What is the time period for registration with Registry (POSOCO)?

Ans: As per the clause 3.2 to 3.4 of the Procedure, there is a provision of maximum 30 working days for registration with Registry (POSOCO). After registration with Registry, the DCs shall register themselves with Power Exchanges (PXIL, IEX) and trading of ESCerts shall commence subsequently. Time regarding registration of DCs to become eligible entity will be informed by BEE (Administrator).

Ques 11: When trading/transaction of ESCerts will be done and how long will be the trading process? When a DC has to submit Form D?

Ans: Trading/transaction of EXCerts shall be done on continuous basis i.e. every Tuesday on weekly basis. After submission of Form D (see clause 8.6 of the Procedure) in June, the trading of ESCerts shall continue with respective sellers and buyers as defined in clause 2.2.1 and 2.2.2 respectively.

 Ques 12: Is bilateral trading permitted?

Ans: As per the clause 4.4 of the Procedure and clause 12(4) of PAT Rules, bilateral trading even with the same corporate group is not permitted and accordingly inter-sector self-retention/transfer of ESCerts is also not permitted.

Ques 13: Is there any floor price od ESCerts?

Ans: There is no floor price of ESCets declared at this stage. The price of ESCerts will be dtermied by the market based on the demand and supply of ESCerts.

Ques 14: What is the life of ESCerts?

Ans: Every ESCert has a life of two cycles for a particular DC. The Ecerts gained by DCs in PAT Cycle-1 can be used till the end of PAT Cycle – 2.

Ques 15: Is the trading of ESCerts a complete online process?

Ans: The trading of ESCerts id a complete online process.

Ques 16: If a DC has membership at both the power exchanges and against the same ESCerts DC is making dual transactions that is one at the IEX and other at the PXIL. Then how will this be controlled?

Ans: Dual transactions for the same ESCerts is not permitted. There is however a mechanism whereby the Registry does a cross checking from both the Power Exchanges before permitting the Exchanges to go ahead with the transaction.

Ques 17: What is the reason behind expiry of ESCerts period?

Ans: The objective of the scheme is to make industry more energy efficient. If ESCerts do not have a validity period then industry would keep banking the ESCerts rather than introducing innovation for making their industries more efficient.

Ques 18) Where will the penalty fund go?

Ans: The Penalty will go to the State exchequer.

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