New Delhi: The Delhi Electricity Regulatory Commission (DERC) has filed a review petition with the Appellate Tribunal for Electricity (APTEL) against its April 20 order that directed the regulator to initiate liquidation of regulatory assets (RA) worth approximately Rs 38,500 crore. DERC is seeking an extension of time until July 1 to begin the liquidation process, arguing that it will be able to complete a true-up order for the financial year 2023-24 by June 30. An official stated that the true-up order is a prerequisite before liquidation can commence.
Understanding the True-Up Order
A true-up order is a final adjustment approved by the power regulator that compares a discom's actual audited expenses and revenues with the earlier projections used for setting tariffs. If approved costs exceed estimates, consumers may face surcharges or higher tariffs. Conversely, if collections exceed actual costs, consumers may receive relief through lower electricity tariffs.
Background of the Case
According to the review petition, DERC had initially sought three months to initiate the liquidation, but APTEL granted only three weeks in its April 20 order. The power distribution companies (discoms) in Delhi have been pushing for liquidation of regulatory assets pending since 2007 and have filed a separate petition with APTEL, which is scheduled to be heard on May 21.
Impact on Consumers
The liquidation is necessary to ensure that the long-overdue amount can be recovered from consumers in a phased manner over seven years. This move will lead to higher power bills, as DERC will impose a higher RA surcharge to recover the dues. Regulatory assets are created when discoms' costs for power purchase, transmission, and distribution are not fully recovered through tariffs, often due to governments avoiding tariff hikes for political reasons. The resulting gap is recorded and approved by regulators to be recovered through future tariff revisions.
Delhi's Tariff Freeze
In Delhi, electricity tariffs have not been revised since 2014-15. While the cost of supplying power has continued to rise, tariffs remained unchanged, leading to a substantial build-up of regulatory assets amounting to Rs 38,500 crore. This amount represents deferred costs that will eventually be passed on to consumers through higher tariffs, along with applicable interest. An official noted that while this approach kept power bills low in the short term, it resulted in significant unrecovered costs over time.
Supreme Court Intervention
The situation came under scrutiny following an August 2025 Supreme Court order, which mandated the recovery of pending dues in the power sector across states. Previously, discoms had moved the apex court seeking directions for liquidating the assets. In October 2025, the Supreme Court directed DERC to liquidate the assets over seven years, from April 1, 2024, to March 31, 2031. The court also directed APTEL to oversee the liquidation process.
Audit and Asset Breakdown
Earlier this year, DERC approached APTEL seeking permission to initiate the process of getting Delhi's discoms audited by CAG-empanelled auditors. According to official records, the total RA includes Rs 19,174 crore for BRPL, Rs 12,333 crore for BYPL, and Rs 7,046 crore for TPDDL. These figures represent approved costs and reflect the actual expenditure incurred in supplying electricity.
