APTEL disposes IEX plea on CERC market coupling directions

The Appellate Tribunal for Electricity (APTEL) has disposed of an appeal filed by Indian Energy Exchange Limited (IEX) against the Central Electricity Regulatory Commission’s (CERC) July 2025 directions on implementing market coupling in the Day-Ahead Market (DAM) segment. The Tribunal held that IEX cannot be treated as a “person aggrieved” at this stage, as market coupling can be operationalised only after CERC frames separate regulations.

The dispute arose from CERC’s suo motu order dated July 23, 2025, in Petition No. 8/SM/2025. The Commission had directed phased implementation of market coupling for DAM, proposing a round-robin arrangement by January 2026. Under this model, power exchanges would act as the Market Coupling Operator (MCO) on a rotational basis, with Grid-India serving as the fourth MCO for backup and audit functions.

IEX challenged the order before APTEL on several grounds. It argued that the decision contravened the CERC (Power Market) Regulations, 2021, violated principles of natural justice, and would effectively lead to expropriation of business from IEX to other exchanges.

A bench comprising Chairperson Justice Ramesh Ranganathan and Technical Member Seema Gupta examined whether the July 23, 2025 proceedings qualified as an “order” under Section 111(1) of the Electricity Act, 2003, and whether IEX was entitled to maintain the appeal. The Tribunal held that the proceedings fall within the scope of an “order” under Section 111(1). However, it ruled that IEX has not suffered any civil consequences or legal prejudice, as Regulation 39 of the Power Market Regulations, 2021 states that market coupling provisions will come into effect only when separately specified through regulations by CERC. Since no such regulations have been notified and implementation has not commenced, the appeal was considered premature.

The Tribunal noted that CERC has been conducting a consultative process on market coupling since 2023. This included issuance of a staff paper, constitution of a committee under Member (CERC), and shadow pilot studies undertaken by Grid-India. Reports submitted by Grid-India in January and June 2025 formed part of the Commission’s deliberations. CERC also issued a corrigendum dated January 8, 2026, clarifying that the July 2025 proceedings were “directions” forming part of the pre-legislative consultative process, and not a final order.

During the proceedings, IEX sought to amend its appeal in light of an ex-parte interim order passed by the Securities and Exchange Board of India (SEBI) on October 15, 2025, alleging insider trading involving certain CERC officials. The Tribunal observed that the impugned order was signed by the Chairperson and Members of CERC, against whom no allegations of collusion or non-application of mind were made. Senior counsel for IEX stated that no aspersions were being cast on the Chairperson and Members.

APTEL observed that CERC, as an independent regulator, should remain above suspicion. It suggested that, pending completion of investigations by SEBI and CERC’s departmental committee, the officers referred to in the SEBI order be kept away from the regulation-making process concerning market coupling.

The Tribunal clarified that IEX remains at liberty to challenge any future regulations framed by CERC to implement market coupling, along with all grounds raised in the present appeal. The present order does not preclude IEX from challenging the July 2025 proceedings in conjunction with any subsequent regulatory action.

CERC, represented by the Additional Solicitor General, had argued that the appeal was premature and sought to delay the delegated legislation process. Power Exchange India Limited and Hindustan Power Exchange Limited supported CERC’s position, submitting that the 2021 Regulations contain enabling provisions that require separate regulations for implementation.

With these observations, APTEL disposed of the appeal and all connected interlocutory applications, declining relief to IEX at this stage while preserving its right to challenge future regulations.