CERC Refuses To Grant Relief From Trading Licence Revocation

The Central Electricity Regulatory Commission (CERC) has dismissed a review petition filed by Kreate Energy (India) Pvt. Ltd., reaffirming its earlier decision to pursue revocation of the company’s inter-State trading license over prolonged payment defaults.

In its order, the commission rejected Kreate Energy’s plea that the May 2025 show-cause notice was based on errors of fact and law. The company had argued that pending disputes and recoverable dues from counterparties should not be treated as defaults, and that revocation would cause cascading harm to ongoing contracts.

The regulator found otherwise, noting that Kreate Energy had failed to pay Uttarakhand Power Corporation Ltd. despite receiving full settlement from the Indian Energy Exchange (IEX). Post-dated cheques issued by the trader were dishonored, and repeated directions to clear dues in installments went unheeded.

CERC emphasized that electricity trading is a regulated activity requiring strict compliance, and that defaults undermine market discipline and investor confidence. The commission also dismissed the company’s contention that disputes should be referred to arbitration, ruling that revocation proceedings are regulatory in nature and not contractual.

“The petitioner’s conduct amounts to prolonged and willful default,” the order stated, underscoring that public interest requires enforcement of trading license conditions.

While denying the review petition, the commission granted Kreate Energy 10 additional days to respond to the original show-cause notice. The revocation process remains active, leaving the company’s future in the power trading market uncertain.

The case highlights the regulator’s tougher stance on compliance in the electricity sector, where liquidity stress and payment delays have often strained trading relationships. For Kreate Energy, the ruling marks a critical juncture that could determine whether it retains its license or exits the market.