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Home News Power Sector News CERC to review functioning of power exchanges

CERC to review functioning of power exchanges

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CERCPower sector watchdog CERC plans to review regulatory compliance levels and operational efficiencies of the country's two electricity exchanges as part of efforts to safeguard the interest of stakeholders. Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL) are the two functional electricity bourses. Both began their operations in 2008.

Under the planned comprehensive 'health check' of the bourses, the Central Electricity Regulatory Commission (CERC) would review a slew of factors, including related party transactions and nature of relationship between promoter and the power exchanges.

To carry out the review, CERC has recently sought bids from interested entities.

"The period of the review/investigation will be FY 2012- 14 (except related party transactions which would be examined since inception of power exchange)," CERC has said.

CERC plans to "undertake review of the overall regulatory compliance to (CERC) regulations, the robustness of operational processes, the control and checks placed by the power exchanges to ensure business continuity, safeguarding public interest and absence of any untoward systemic risk".

The review would also cover the nature of commercial relationship between present trading system technology provider with the power exchange; monetary flows between the bourse, its member and their clients; processes in place to maintain bid data confidentiality and market surveillance, among others.

Elaborating on the mechanisms in place at these bourses, CERC said the exchanges have constituted a Market Surveillance Committee headed by an independent director.

"The committee shall submit quarterly surveillance report to the Commission. The power exchange shall also carry out periodic IT system audit for data security, date integrity and operational efficiency and submit its report to the Commission annually. However, this has not been done since 2011," the regulator has said.

In six years since their inception, power exchange business has seen good growth. These bourses offer day-ahead and term-ahead market products besides trading in renewable energy certificates.

Indian Energy Exchange (IEX) is the leading bourse with more than 95 per cent market share and billions of units of electricity is traded every month on it.

Source- Business standard

 

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