APTEL Dismisses IEX Appeal on Market Coupling, Says Challenge Premature

The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by India Energy Exchange Ltd. (IEX) challenging the Central Electricity Regulatory Commission’s (CERC) directions on implementing market coupling in the Day-Ahead Market (DAM). While the tribunal held that the CERC’s directions qualify as an “order,” it ruled that the appeal was premature as no final regulations have yet been issued.

IEX Challenges Market Coupling Move

IEX argued that the CERC’s proceedings were arbitrary and aimed at redistributing market share to competing power exchanges without delivering meaningful consumer benefits. The exchange claimed that the four-month shadow pilot showed only marginal gains, citing a 0.3% increase in economic surplus, which it said was insufficient to justify a structural overhaul of the power exchange ecosystem.

The company further contended that market coupling would reduce power exchanges to “bid aggregators,” stifle innovation and competition, and effectively expropriate its business model. It also alleged violations of natural justice, claiming the regulator failed to disclose Grid-India reports and did not adequately address stakeholder objections.

In addition, IEX referred to a SEBI interim order dated October 15, 2025, alleging insider trading involving CERC officials and claiming the decision-making process was tainted by the leakage of unpublished price-sensitive information.

CERC and Other Exchanges Oppose Appeal

CERC and other respondents argued that the appeal was not maintainable because the directions were only administrative steps preceding the formulation of formal regulations. The Commission said no regulations had yet been issued under the Electricity Act, and therefore no appealable order existed.

The regulator also suggested that the appeal was an attempt by a dominant market player to preserve its market share and delay reforms aimed at increasing competition. Addressing the SEBI allegations, CERC clarified that the interim order was ex-parte and concerned certain staff members rather than the Commission as an institution. Competing power exchanges also argued that market coupling has long been a policy objective and that IEX had not suffered any legal injury.

Tribunal Recognises Order but Finds Appeal Premature

APTEL rejected CERC’s claim that the directions were merely pre-legislative, holding that the decision to implement DAM market coupling in a round-robin mode constituted an “order” under the Electricity Act. However, the tribunal concluded that the proceedings were administrative rather than legislative or quasi-judicial in nature.

The tribunal’s primary ground for dismissal was that IEX was not yet a “person aggrieved,” as the directions have not been operationalised. APTEL noted that power exchanges continue to function as before and that separate regulations are required to implement market coupling. Since these regulations have not yet been framed, the exchange’s business has not suffered any material impact.

Tribunal Addresses Insider Trading Concerns

While acknowledging the seriousness of SEBI’s interim findings, APTEL said the allegations did not invalidate the order issued by the CERC Chairperson and Members. However, to maintain regulatory integrity, the tribunal directed the Commission to keep the officers named in the SEBI order away from the future regulation-making process related to market coupling.

With the appeal dismissed, APTEL clarified that IEX retains the right to challenge the final regulations and the proposed round-robin implementation once the formal regulatory framework is notified.