POWER EXCHANGE INDIA LIMITED
http://www.powerexindia.com/

Promoted By

Dear Sir/Madam

Power Exchange India Limited (PXI), a company promoted by two of India’s leading exchanges, National Stock Exchange of India Limited (NSEIL) and National Commodity & Derivatives Exchange Limited (NCDEX), has been set up to provide electronic, transparent and neutral platform for trading of electricity. PXI has got the approval from Central Electricity Regulatory Commission (CERC) and aims to start operations shortly.

PXI aims to provide an easy to access, fully electronic market place which provides substantial benefits to buyers and sellers of Power. Some salient features of PXI are provided in the introductory note attached along with this letter. We urge you to participate in this unique opportunity and make use of the world-class trading infrastructure being put into place by two of the leading institutions in the exchange space in the country.

Both NSEIL and NCDEX bring with them deep rooted understanding of shaping Indian Capital and Commodity markets. Their presence in the venture would lend to PXI the required wisdom and strength in its efforts to create a truly vibrant market in electricity.

PXI is organizing Road Shows in various cities to show case it’s Exchange and to have a discussion with the stakeholders on intricacies of trading on the Exchange. Please refer the road show schedule below.

PXI believes that discussions with important participants in power sector like you would help PXI to provide better services and products. PXI urges you to participate in this Road Show and look forward to the interactions

We invite you to join us in developing a vibrant electricity market in India.

Sincerely,

Rupa Devi Singh
Chief Executive Officer

Road shows Schedule

• Kolkata  - September 12, 2008 at Hotel The Oberoi Grand, Kolkata from 09:30 AM to 01:30 pm followed by lunch

• Information about More cities to follow soon. Please send us an email detailing your interest and the city you want to attend the roadshows in.

RSVP for Roadshows

InfralineEnergy Vineeta Kaushik vineeta@infraline.com Tel: 011- 6609 0600 Ext. 216

National Stock Exchange on Behalf of PXI Himanshu Chandrakar Tel: 0-9821267978

Invitation to Participate in Trading of Power through Power Exchange India Limited

Introduction

Power Trading has been recognized as a distinct activity vide the Electricity Act, 2003. In order to promote Competitive Power markets and trading of Power in an organized way, Central Electricity Regulatory Commission (CERC) in February’07 had issued guidelines for setting up and operating Power Exchanges. Power Exchange India Limited (PXI) has been set up in response to these guidelines to provide an on line platform for trading of Power. PXI aims to start operations by Oct’08.

Promoters

PXI is promoted by two of India’s biggest exchanges

• National Stock Exchange of India Limited (NSEIL)

• National Commodity & Derivatives Exchange Limited (NCDEX)

Key Features of the Exchange

• Nation-wide, electronic Exchange for trading of Power

• Exchange will handle power trading and transmission clearance simultaneously

• Transparent, neutral and efficient electronic platform

• Trading to start with day-ahead contracts (all 24 hours)

• More Contracts to be introduced subsequently

How is it different from the present bilateral trading

• No separate booking of Transmission Corridor required

• All the participants come to one single platform and get access to each other on a national basis

• Buyers and sellers can participate directly

• Trade Guarantee

  • Exchange to guarantee payments to sellers

  • Buyers - All confirmed trades on the exchange to be scheduled and deviations to be settled through UI

• Online Buying/Selling of Power

Who can participate

• Inter-State Generating Stations (ISGSs)

• Distribution Licensees/Franchisees

• IPPs, connected on ISTS

• CPPs & IPPs *

• Open Access Customers*

• Electricity traders

• State Generating Stations

• Banks, Financial Institutions (as Clearing Members)**

* With a Clearance to obtained from the concerned SLDC
** Clearing members to provide fund flow services to Trading Members

How to participate

a) Become a Member

PXIL offers four types of membership:

1. Trading Member (TM): TCM membership shall entitle the members to trade, both for themselves and / or on behalf of their clients.

2. Trading and Self Clearing Member (TSCM): TSCM membership shall entitle the members to trade and clear for themselves only.

3. Trading cum Clearing Member (TCM): TCM membership shall entitle the members to trade and clear, both for themselves and / or on behalf of their clients.

4. Professional Clearing Member (PCM): PCM membership shall entitle the member to clear on behalf of his clients and other TMs.

b) Become a Client of a Member of PXI :

To be able to buy/sell electricity on PXI any Client of a member or the member himself is required to meet the following criteria

• Either the entity (client of a member or the member himself) are connected to the grid and are eligible to buy and sell electricity – Generators, Distributors, Open access customers etc fall under this category or Traders who hold a valid trading license issued by CERC

• All the entities are required to obtain the standing Clearance from the respective SLDCs in the format given under “Procedure for scheduling of (Open Access) collective transactions” by CTU.

For more information on the exchange, membership, participation please contact:

Himanshu Chandrakar +91 9821267978

Kindly visit our website www.powerexindia.com.

You can also write us at info@powerexindia.com

Fee and Deposit Structure for Power Exchange India Limited

1. Membership Fee Structure (Rs Lakhs)

* For a maximum of self + 5 clients. For every additional Client Rs 2 lakhs per client has to be given as additional interest free security deposit

2. Apart from the processing fee of Rs 5000/-, an amount of Rs 1,00,000/- (Rupees One lakh) would be payable along with the application , which would  be adjusted against one time fee on successful grant of membership. In the event that the membership is not approved, the sum of Rs 1 lakh would be refunded to the applicant.

3. 50% of the Interest free deposit has to be given at the time of approval of membership. The remaining 50% would be collected one week prior to commencement of trading on the exchange. Based upon volume traded by members, the Exchange may alter the deposit structure in subsequent years and may include options to furnish the same in the form of Fixed Deposit/ Bank Guarantee or other financial instruments as may be considered appropriate by the Exchange.

4. Annual Fee for the year 2008-09 would be charged on a pro-rata basis depending upon the date of commencement of operations of the exchange.

5. The Fee structure for Professional Clearing Members would be announced shortly.

****