APTEL Disposes IEX Appeal, Allows CERC To Proceed On Market Coupling Framework

In a significant legal development for India’s power market, the Appellate Tribunal for Electricity (APTEL) has disposed of an appeal filed by India Energy Exchange Limited (IEX) against the Central Electricity Regulatory Commission (CERC). The matter, registered as Appeal No. 298 of 2025, related to CERC’s directions issued on July 23, 2025, for the implementation of “market coupling” in the Day-Ahead Market (DAM).

Market coupling is a mechanism under which bids from all power exchanges are aggregated and matched to determine a single uniform market-clearing price. The objective is to ensure price discovery through a centralized process rather than through separate exchanges operating independently. IEX, which holds a dominant share in the short-term power trading market, challenged the CERC’s move on multiple grounds. The exchange argued that the directions were anti-competitive in nature and were aimed at redistributing its market share to rival exchanges. It also raised concerns over transparency, stating that the regulator had relied on shadow pilot reports prepared by Grid-India, which were not placed in the public domain for stakeholder consultation.

During the hearings, an important issue emerged regarding the legal status of CERC’s communication. IEX contended that the July 23 communication amounted to a binding judicial order and was therefore challengeable. In response, CERC issued a corrigendum clarifying that the communication was not a final order but merely “directions.” According to the regulator, these directions were preliminary steps toward initiating a formal legislative process for framing detailed regulations under Regulation 39 of the Power Market Regulations, 2021.

In its judgment dated February 13, 2026, APTEL declined to set aside the CERC’s directions. The Tribunal observed that market coupling cannot be implemented unless and until CERC notifies specific regulations to operationalize the mechanism. As of the date of the ruling, even draft regulations had not been issued. Therefore, the Tribunal held that there was no immediate cause for interference.

APTEL further noted that IEX could not be considered a “person aggrieved” at this stage, as its operations continue unchanged. However, the Tribunal provided an important safeguard. It clarified that once formal regulations are notified, IEX would have the liberty to challenge both the new regulations and the earlier directions before an appropriate legal forum.

For now, the ruling allows CERC to move forward with its regulatory roadmap on market coupling, while preserving the exchange’s right to seek legal remedies in the future if concrete measures are introduced.