Delhi power commission DERC directed to clear dues worth over ₹38,000 crore; electricity tariffs may increase

The development has significant implications for residents of the city, with the possibility that power tariffs could be raised to cover the costs.

The Appellate Tribunal for Electricity (APTEL) on Monday directed Delhi Electricity Regulatory Commission (DERC) to begin the liquidation of regulatory asset dues of over ₹38,000 crore, holding that there was no “legal impediment” to begin the process, and told it to complete the exercise within three weeks. The development has significant implications for residents of the city, with the possibility that power tariffs could be raised to cover the costs.

Regulatory assets are deferred costs for distribution companies that arise when electricity tariffs are not revised in line with rising supply expenses. (AP/Representative)

The tribunal rejected the DERC plea, seeking time till July 1 to begin the process even as it criticised the delay, noting that it would ultimately burden consumers. It also set aside the DERC’s move to conduct an audit of power distribution companies through the Comptroller and Auditor General (CAG), directing it instead to appoint an independent chartered accountant within a week and complete a “strict and intensive audit” of the discoms within three months, in line with earlier Supreme Court directions.

Will power tariffs in Delhi increase? (HT GFX)

In its order, APTEL observed that the DERC has been “delaying” the liquidation of regulatory assets for one reason or the other which has led to an increase in the amount of regulatory assets day by day.

“We do not see any cogent and plausible reason which is preventing the commission to commence the liquidation of regulatory assets. The entire conduct of the Commission in this regard appears to be malafide and needs to be deprecated,” said the order.

Regulatory assets are deferred costs for distribution companies that arise when electricity tariffs are not revised in line with rising supply expenses. These costs accumulate over time and are later recovered from consumers, usually with added interest. In Delhi’s case, tariffs have not been revised since 2014–15, leading to a massive build-up of dues.

According to a DERC affidavit submitted to APTEL in January 2026, the total regulatory assets to be recovered stand at ₹38,552 crore. This includes ₹19,174 crore for BSES Rajdhani Power Limited (BRPL), ₹12,333 crore for BSES Yamuna Power Limited (BYPL), and ₹7,046 crore for Tata Power Delhi Distribution Limited (TPDDL).

Reacting to the development, Delhi power minister Ashish Sood told HT, the government would “explore all legal possibilities and will not allow the burden to fall on consumers”.

“The mounting regulatory assets are a legacy issue. This is a result of the inefficiency and corruption...There is a need for CAG audit of power discoms and we will fight for it.”

When reached for comment, DERC officials said that, since it is a quasi-judicial body, they could not comment on the matter.

In its order, the tribunal rejected the commission’s request for extension, calling it “totally unreasonable” and “unacceptable”, noting that the DERC had been holding back on the regulatory assets, despite giving repeated undertakings and assurances to the Supreme Court, Delhi High Court as well as to the tribunal.

“We direct the Commission to commence the process of liquidation of regulatory assets as per the RA judgement of the Supreme Court within three weeks from today positively. However, considering the statutory procedure to be followed for issue the true up order, time upto 30.06.2026 is granted for passing true up order of FY 2023-24. 53,” said the order.

It also disagreed with the DERC’s argument that the proposed audit flowed directly from an August 2025 Supreme Court judgment, which flagged mounting “regulatory assets” as a sign of regulatory failure.

It said that, while the apex court mandated a strict audit, it never specified that it must be conducted by the CAG.

“It is axiomatic that the Supreme Court, while directing the Regulatory Commissions to conduct strict and intensive audit of the discoms vide RA judgement, has nowhere specified that such audit must be entrusted to CAG,” the Tribunal said in the order.

It also noted that the discoms were not given an opportunity to present their case before the audit decision was taken. On these grounds, APTEL quashed the approval for the proposed CAG audit.

According to a senior government official, the tribunal had agreed to the request for a CAG audit at previous hearings. Since the audit involved private entities, the APTEL had directed that lieutenant governor approval be taken. The Delhi government had received the LG’s approval for the exercise before the request was rejected on Monday.

Last month, when the power tariff hike issue had surfaced, Delhi Power minister Ashish Sood had said the government will not allow the burden of increased power tariffs to fall on consumers.

In its judgment last year, the SC made it clear that such deferrals cannot continue indefinitely. It directed that regulatory assets, along with interest, must be recovered in a structured and time-bound manner, with APTEL tasked with monitoring compliance.

DERC will prepare a phased recovery plan spread over seven years, in line with the Supreme Court’s directive to clear dues between April 1, 2024, and March 31, 2031, officials had said last month. Officials said current tariffs still reflect cost levels from more than a decade ago, even as the actual cost of procuring and supplying electricity has steadily risen.