CERC Grants HPX Additional Time To Appoint MD, Independent Director

CERC Grants HPX Additional Time To Appoint MD, Additional Director

The Central Electricity Regulatory Commission (CERC), in its latest judgment, asked the Hindustan Power Exchange Limited (HPX) to appoint a Managing Director and an Independent Director by the end of March 31, 2024. The order was passed to ensure CERC’s Power Market Regulations (PMR) 2021 compliance.

The order came to the fore when the power exchange company approached the CERC seeking the granting of additional time to comply with the power market regulations. As per the mandate of the regulations, the power exchange companies in India need to appoint a shareholder director, managing director, and independent directors on their board.

In its petition before the CERC, the company told the Commission that they had appointed other board members but needed time to appoint its MD and an independent director. In the petition, the HPX said it resumed operations in June 2022 and was operating in its nascent phase. It also showed their other works of compliance with the power market regulations (PMR) 

HPX is one of India’s three active power exchange companies besides IEX and PXIL. On May 5, 2021, the CERC allowed registration of HPX as a power exchange. On June 27, permission was given to commence operations. As per the CERC documents, HPX has three shareholders’ directors and two independent directors. 

However, the position of MD is vacant besides the post of an independent director. HPX also apprised the CERC that it already has a manager to handle the operations of the power exchange. It also said that HPX is a new entity in the sector; it just started seeing revenue collections. 

“The Petitioner has submitted that the whole process of appointment of the Managing Director may take some time as the interview of the shortlisted candidates is to be done, and then the final process for appointment, including the approval of the Nomination and Remuneration Committee and the Board of Directors. The selected candidate may also take some time to join after completing the necessary formalities,” the order said.

In its judgment on the matter, while granting the additional time, the CERC used its’ power to relax’ provision to give liberty to the firm to comply with PMR 2021. 

“In view of the submissions as stated above, we are inclined to invoke our power to relax. In the exercise of the powers under Regulation 56 of PMR 2021, the Commission hereby grants the Petitioner time up to 31.03.2024 to align its requirement of the appointment of a Managing Director and alignment of the number of independent directors as per the requirement under Regulation 17 of PMR 2021,” the CERC judgment said.