The Central Electricity Regulatory Commission (CERC) will audit the price discovery mechanism being used at the country’s two power exchanges — Indian Energy Exchange and Power Exchange India.
At power exchanges, utilities and other electricity providers offer to sell a specific quantity of energy at a particular price while potential purchasers give their bids.
These exchanges help in discovering the price of power based on the principle of demand and supply.
The commission has already invited bids for audit of trading software algorithm used by the power exchanges for the price discovery.
The audit would look at whether market rules and regulations were being adhered to in the price discovery process. A senior CERC official said international entities were expected to participate actively in the bidding process.