Supreme Court Orders Timely Payment of Rs 27,200 Crore to Delhi Discoms

The Supreme Court has ruled that regulatory assets totaling Rs 27,200.37 crore, which are due to Delhi's three private electricity distribution companies (discoms), must be paid off within three years. This decision impacts Delhi power consumers and addresses regulatory asset growth, with clear payment guidelines set for the discoms.

The Supreme Court issued a directive on Wednesday mandating the payment of Rs 27,200.37 crore in regulatory assets to Delhi's three private discoms within three years. These regulatory assets, representing deferred revenue meant to be recouped via future tariffs, have escalated to Rs 12,993.53 crore for BRPL, Rs 8,419.14 crore for BYPL, and Rs 5,787.70 crore for TPDDL as of March 31, 2024.

Justices P S Narasimha and Sandeep Mehta delivered the verdict in response to petitions by the discoms against the Delhi Electricity Regulatory Commission's tariff orders that contributed to the growth of regulatory assets. Highlighting tariff determination issues, the bench described regulatory assets as intangible assets recognizing revenue shortfalls when costs can't be fully recovered through tariffs.

The court emphasized that tariffs must reflect actual costs, with revenue gaps permissible only under exceptional circumstances. It limited regulatory assets to three percent of the Annual Revenue Requirement, stressing the need for clear liquidation roadmaps to be monitored by APTEL. The decision aims to protect consumers from disproportionate burden due to unchecked regulatory asset growth.

(With inputs from agencies.)