CERC Initiates License Revocation Proceedings Over Repeated Power Trading Compliance Failures

The Central Electricity Regulatory Commission (CERC) has initiated suo-motu proceedings against Instinct Infra & Power Limited over repeated non-compliance with electricity trading regulations and has warned that the company’s inter-state trading license may be revoked if it fails to respond within the stipulated time.

According to the Commission’s order dated May 13, 2026, the New Delhi-based company has held an inter-state electricity trading license since 2005. Over the years, the license has been re-categorized multiple times and is currently classified under Category IV as per the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for grant of Trading License and other related matters) Regulations, 2020.

The CERC observed that the company failed to comply with mandatory reporting requirements under Regulations 11 and 12 of the 2020 Trading License Regulations. These regulations require all trading licensees to regularly submit monthly details related to their inter-state and intra-state electricity trading activities, transactions carried out through power exchanges, and electricity banking details.

In addition to the monthly reporting obligations, trading companies are also required to submit annual returns certified by a Chartered Accountant along with audited balance sheets, annual reports, and auditor reports. However, the Commission noted that Instinct Infra & Power Limited did not furnish the required information despite repeated communications from the regulator.

The Commission further highlighted a violation related to trading volume limits. Under Regulation 9(3), trading licensees are not permitted to exceed 110 percent of the trading volume allowed under their respective license category. In cases where the trading volume is expected to exceed the approved limit, the licensee must apply for a license upgradation under Regulation 15.

CERC stated that the company had earlier been directed to apply for an upgradation of its license from Category IV to Category III. However, the respondent failed to submit the required application.

The order records that between April 2025 and February 2026, the Commission issued seven reminders through letters and emails asking the company to provide the pending information and complete the license upgradation process. Despite these repeated notices, the company neither submitted the necessary documents nor filed the required petition before the Commission.

Taking note of the continued non-compliance, the Commission said the respondent’s conduct amounts to a “willful and prolonged default” under Section 19 of the Electricity Act, 2003. The provision empowers the Commission to revoke a trading license if the licensee fails to discharge its functions properly or if revocation is considered necessary in public interest.

The CERC has now granted the company two months to explain why its license should not be revoked. The order also serves as a statutory three-month notice. The Commission clarified that if no satisfactory response is received within the prescribed period, the company’s inter-state trading license will automatically stand revoked after the expiry of three months from the date of the order.