Delhi govt cracks down on power discoms, directs CAG audit over ₹ 38,500 cr pending RAs – Here’s what we know | Today’s news

The Delhi government, led by CM Rekha Gupta, on Wednesday ordered the Comptroller General and Auditor General (CAG) to conduct an audit of distribution companies in the capital amid concerns over regulatory assets (RAs) worth nearly ₹38,500 crores which has accumulated over the years and is to be eventually recovered from the electricity consumers.

This comes after the Delhi High Court on June 22 refused to interfere with the Delhi government’s decision to have the CAG examine the accounts of BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL). Dismissing the petition filed by the two power distribution companies, Justice Tejas Karia found their challenge premature at this stage. After the decision, Delhi Power Minister Ashish Sood welcomed the high court’s decision.

According to an order issued by the Delhi Power Department, the CAG will conduct a comprehensive and rigorous audit to probe why three city power discoms — BRPL, BYPL and Tata Power Delhi Distribution (TPDDL) — continued to operate without restoring growing regulatory assets, PTI reported.

The order said the audit should ideally be completed within three months of its notification, though the CAG may grant additional time depending on the scope and complexity of the task.

According to the order, the audit is expected to be completed within three months from the date it was announced, though the CAG may extend the timeline depending on the scope and complexity of the exercise.

“The issue of CAG audit of Delhi discoms is currently pending before the courts. As the matter is sub judice, it would not be appropriate to comment further,” a BRPL spokesperson said.

No immediate response from other power distribution companies.

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If the discoms do not take further legal action, it will mark the first CAG audit of electricity distribution companies in Delhi since the sector was privatized in 2002. A previous attempt by the former AAP government to subject the discoms to a CAG audit was blocked by the Delhi High Court in 2015.

Regulatory assets (RA) are deferred costs incurred by energy distribution companies as a result of fluctuating fuel prices. They represent the difference between the average cost of electricity supply and the revenue that is earned through consumer tariffs and government subsidies.

Outstanding regulatory assets, estimated at ₹38,500 crore and the debts due to BRPL, BYPL and TPDDL are said to be recovered through asset surcharge as per the regulations included in the electricity bills of the consumers.

According to the order, the Delhi government in its meeting on June 29 approved in public interest a recommendation for a “rigorous and intensive” audit by the CAG to examine why power distribution companies continue to carry these unclaimed regulatory assets.

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The power ministry’s order authorizing the audit received the Delhi governor’s nod.

DERC filing before APTEL

Earlier this year, in April, the Appellate Tribunal for Electricity (APTEL) rejected the Delhi Electricity Regulatory Commission’s (DERC) plea seeking a CAG audit of discoms. Instead, it ordered the regulator to begin liquidation of pending regulatory assets within three weeks.

According to DERC’s filing before APTEL, the outstanding regulatory assets include ₹19,174 crore for BRPL, ₹12,333 crore for BYPL and ₹7,046 crore for TPDDL. These are expenditures allegedly approved by the regulator for the supply of electricity.

Cumulative regulatory assets increased to approx ₹38,500 crore as electricity rates remained unchanged for more than a decade.

Pursuant to the Department of Energy order, the Supreme Court, in its decision dated August 6, 2025, called for a rigorous and comprehensive audit of the circumstances under which power distribution companies continued to accumulate regulatory assets without recovering them.

The order further stated that the Comptroller and Auditor General (CAG) through a communication dated January 20 this year has given approval in principle to audit the accounts of the three discoms, subject to the permission of the Governor of Delhi under Section 20(1) of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971, Act.

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In connection with the earlier decision of the Appellate Tribunal for Electricity (APTEL) rejecting the CAG audit, the order said that on June 6, notices were issued to the discoms under Section 20(3) of the Act inviting them to submit their submissions and appear for a personal hearing.

She added that the statements submitted by the discoms were scrutinized in accordance with law and the matter was subsequently discussed by the Delhi Cabinet in a meeting chaired by CM Gupta.

What did Sood say about the audit order?

Sood welcomed the formal audit order on Thursday, describing it as a “historic moment for transparency, accountability and governance reforms” in the capital’s energy sector.

Describing the move as a major milestone, Sood mentioned that it represents a victory for every electricity consumer and every honest tax payer in Delhi.

“The people of Delhi have every right to know the near value of regulatory assets ₹38,000 crore kept growing and who benefited while this burden continued to hang on them. This CAG audit will reveal the facts,” claimed Sood.

Sood said no honest taxpayer in Delhi should bear the cost of someone’s “vested interests, special favors or wrong decisions”, adding that every rupee of public money must be protected.

Sood said that for years after the privatization of electricity distribution, some financial decisions, special arrangements and growing liabilities were not subjected to sufficient public scrutiny. He claimed that “the previous AAP government chose to protect the system instead of examining it. What they failed to do in a decade, our government has started in a few months.”