CERC directs audit of power exchanges, citing violations

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Indian Energy Exchange (IEX), Hindustan Power Exchange (HPX) and Power Exchange India Ltd (PXIL)— the CERC stressed the need for a comprehensive review of operations at the exchanges in order to ascertain compliance with the provisions of the Power Market Regulations (PMR) 2021. “The commission directs its staff to arrange to conduct an audit of the processes as well as software of the three power exchanges in terms of the relevant provisions of PMR 2021.

For this purpose, suitable agency(ies) may be appointed. Based on the findings in the audit report, the Commission may issue further directions as deemed necessary,“ said the order.

Citing the Market Surveillance Committee (MSC) reports and Risk Assessment and Management Committee (RAMC) reports that are submitted every three and six months respectively by the exchanges, CERC said there is no uniformity in the contents of the reports and that there is a need to bring in improvements. On preliminary scrutiny of the quarterly MSC reports, the commission observed instances of manual entry of bids, cancellation and entry of bids after the market hours, and extension of market hours among other violations.

“On perusal of the reports for the period Q1 2019-20 to Q3 2023-24, it is observed that while the instances of such assistance were few initially, there has been an increasing trend of such instances in the recent past, especially in 2022-23. Notably, some of the major buyer and seller members of these exchanges have repeatedly had their bids manually entered through their respective power exchanges," said in the order, adding that there shall be no manual entry of bids by the exchanges on behalf of their members on or after the trading hours.