Power regulator Central Electricity Regulatory Commission (CERC) is considering rationalising transaction fees charged by power trading exchanges, a move that could help reduce electricity costs as the sector prepares for market coupling. The proposal comes as CERC advances market coupling, a reform aimed at improving efficiency, deepening liquidity and promoting price convergence across power exchanges. Over time, the change could lower the overall cost of power procurement for buyers. Market coupling, approved by CERC in July this year after more than two years of deliberations, is set to be implemented in a phased manner starting with the day-ahead market (DAM) from January 2026. Under the mechanism, buy and sell bids across all exchanges will be aggregated to discover a single market-clearing price, replacing the current system of multiple prices across platforms. An official said the regulator finalised a staff paper on the “Review of Transaction Fee charged by the Power Exchanges” in December 2025. The paper examines whether the existing transaction fee framework, capped at 2 paise per unit, remains appropriate in a market that has witnessed a sharp rise in trading volumes and is transitioning towards a unified price discovery system. One proposal under discussion is a fixed transaction fee of 1.5 paise per unit across most trading segments, compared with the current structure where exchanges typically charge close to the ceiling. Another suggestion is to reduce the fee to 1.25 paise per unit for term-ahead market (TAM) contracts, considering their longer tenure and relatively lower operational intensity. India’s exchange-based power market has expanded significantly over the past decade, with traded volumes rising more than 16 times since 2009–10 and crossing 120 billion units in 2023–24. While the day-ahead market once dominated trading, real-time, intra-day and term-ahead segments now account for a growing share. Industry experts said market coupling is expected to narrow price differences across exchanges, improve generation capacity utilisation and allow buyers to access electricity at more efficient rates. Aggregation of bids across platforms is likely to lead to price convergence and some softening, benefiting distribution companies, large consumers and, eventually, end-users. The Indian Energy Exchange currently accounts for nearly 90 per cent of exchange-based power trading volumes, with Power Exchange India Ltd and Hindustan Power Exchange Ltd making up the remainder. Under the approved framework, all three exchanges will serve as Market Coupling Operators on a rotational basis, with Grid-India acting as a backup and audit operator. Officials noted that transaction fee design will become increasingly important once exchanges stop competing on price discovery. With transaction fees contributing over 95 per cent of revenues for established exchanges, any recalibration could have a material impact on the sector. Discussions are at a preliminary stage, and any decision will follow stakeholder consultations and align with the broader objective of improving efficiency, transparency and affordability in India’s power markets.