- 11 May 2022
- ICICIdirect Research
CERC asks power exchanges to explain T+1 contractsIEX - 155 Change: -0.70 (-0.45 %)
News: The Central Electricity Regulatory Commission (CERC) has sought an explanation from the two power exchanges (IEX and PXIL) based on feedback from states that the bourses allegedly introduced unapproved products in the term-ahead markets in April amid huge power demand. Both the exchanges launched T+1 contarcts in DAM which enables settlement in 24 hours. Whereas per rules contracts on term-ahead market cannot be less than T+2, where delivery is in two days.
Views: These new contracts were launched to by-pass the price cap on DAM and RTM where delivery happen next day and same day respectively. Although IEX has released a stamen that these contact were only available for a total of 17 days and volume traded was also very small but it remained to be seen that if CERC take some serious actions against power exchanges.