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Informist, Friday, Jul. 3, 2026

 

NEW DELHI – The Supreme Court Friday put on hold the Comptroller and Auditor General of India's audit of Delhi's power distribution companies such as BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd., and Tata Power Delhi Distribution Ltd., a joint venture of Tata Power Co. Ltd. and the Delhi government. The Comptroller and Auditor General of India was to undertake a strict and intensive audit of the circumstances in which the distribution companies had continued without recovery of regulatory assets. 

 

The apex court also stayed an Appellate Tribunal for Electricity order that directed for appointment of a chartered accountant for auditing the power distribution companies in Delhi. The apex court was hearing a plea by Delhi Electricity Regulatory Commission on whether the audit should be done by the Comptroller and Auditor General of India or a private party. While the appellate tribunal had called for a chartered accountant for the audit purpose, the Lieutenant Governor of Delhi had recently passed a direction that the audit should be done by the Comptroller and Auditor General of India. 

 

The Supreme Court issued notices to the power distribution companies on Delhi power regulator's plea. The top court said that the Comptroller and Auditor General of India should not audit the power distribution companies till the petition by Delhi power regulator is decided. Further, the appellate tribunal's order on appointment of auditor is stayed till further orders, said the court.

 

The bench of Justice K.V. Viswanathan and Justice Shree Chandrashekhar also ordered a status quo on the Delhi power regulator's recovery of money from the public to clear its dues of INR 385.52 billion to Union territory's power distribution companies. The bench noted that Delhi Electricity Regulatory Commission will file an appeal against the appellate tribunal's order that rejected more time to recover these dues. Since this aspect of matter involves interpretation of an apex court verdict passed last year which dealt with a similar issue, the matter should be placed before the same bench on Jul. 15, said the top court. Till Jul. 15, there shall be a status quo on all aspects, including recovery of money from the public, said the apex court.

 

Regulatory assets refer to costs incurred by power distribution companies that are recoverable from customers in the future through regulated rates or tariffs. These are typically created when a distribution company incurs certain expenses that are considered necessary for the provision of reliable and affordable electricity services to customers, but are not immediately recoverable through customer bills. These expenses could include investments in infrastructure, such as transmission and distribution systems, or costs associated with complying with regulatory requirements.  

 

Last year, the top court directed that all regulatory commissions must provide a trajectory for liquidation of existing regulatory assets, which would include a provision for dealing with carrying costs. The apex court had said regulatory commissions must also undertake a strict and intensive audit of the circumstances in which distribution companies have continued without recovery of the regulatory assets. The existing regulatory asset must be liquidated in a maximum of seven years from Apr. 1, 2026, the court had said. The apex court was hearing petitions by BSES Rajdhani, BSES Yamuna, and Tata Power Delhi, challenging the manner in which the Delhi Electricity Regulatory Commission had determined the tariff for retail supply of electricity over the years, leading to the creation and continuation of a regulatory asset. 

 

At 1335 IST, shares of Tata Power traded 0.3% lower at INR 375.20 on the National Stock Exchange.  End 

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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