The Central Electricity Regulatory Commission (CERC) on Friday issued draft amendments to the Central Electricity Regulatory Commission (Power Market) Regulations, 2021, proposing to designate Grid Controller of India Limited (Grid India) as the sole Market Coupling Operator (MCO), shifting electricity price discovery from individual power exchanges to a centralised mechanism.
The Draft Central Electricity Regulatory Commission (Power Market) (Second Amendment) Regulations, 2026, published on April 17, 2026, amend the 2021 Principal Regulations. The draft introduces definitions for “Grid India” and the “Power Market Coupling Procedure (PMCP),” which will govern operational aspects of market coupling.
The amendment proposes that the Price Discovery shall be done by the Market Coupling Operator (MCO) from such date as may be notified by the Commission separately. Until then, power exchanges will continue to exist with price discovery functions.
Under the proposed changes, Grid India shall function as MCO and shall be responsible for the operation and management of Market Coupling. For this, Grid India shall form a separate cell for discharging the functions of MCO.
Further, the Market Coupling shall apply to the Day-Ahead Market (DAM), Real-Time Market (RTM), and other market segments from such date(s) as may be notified by the Commission, with different implementation dates may be notified for each segment.
Under Bid Collection and Aggregation, All Power Exchanges shall collect bids in a uniform bid format from market participants in accordance with the procedure and format stipulated in the Power Market Coupling Procedure (PMCP), with all anonymous and validated bids (both buy and sell bids) then be transmitted from Power Exchanges to the MCO through secured channel as per the timelines stipulated in the PMCP, and lastly, the MCO shall aggregate bids for each market segment received across all Power Exchanges and ensure an efficient price discovery.
The bill explains the price discovery mechanism wherein the principle of maximisation of economic surplus (sum of buyer surplus and seller surplus), taking into account all bid types. Further adding that the price discovered for the unconstrained market shall be a uniform market-clearing price for all buyers and sellers who are cleared, allowing market splitting in case of congestion in the transmission corridor, market splitting shall be adopted.
The bill also requires Grid India, with the approval of the Commission, to formulate the PMCP for the implementation of Market Coupling, within six months of the notification of these amendments.
The draft also extends governance, compliance, and reporting obligations, currently applicable to power exchanges, to the MCO. CERC has invited stakeholder comments and objections by May 16, 2026.
