New Delhi: Power minister Ashish Sood has announced that the Delhi government is considering invoking Section 108 of the Electricity Act, 2003, to order a Comptroller and Auditor General (CAG) audit of the Rs 38,500 crore regulatory assets accumulated since 2007. The objective is to verify the legitimacy and accuracy of these dues before the city's power regulator begins the liquidation process. This move could provide temporary relief to consumers by delaying any immediate power tariff hike in the capital.
What is Section 108 of the Electricity Act?
Section 108 of the Electricity Act, 2003, empowers the Delhi government to issue policy directions to the Delhi Electricity Regulatory Commission (DERC) on matters involving public interest. These include tariffs, subsidy policy, audits, or consumer protection. By invoking this section, the government can direct the DERC to facilitate a CAG audit of the regulatory assets.
Minister's Statement on Transparency
Ashish Sood stated, “Delhi government is considering invoking Section 108 of the Electricity Act to direct a CAG audit of the nearly Rs 38,500 crore regulatory assets accumulated since 2007 before any liquidation process is initiated. The BJP government will not let consumers face the burden of higher electricity tariffs. There should be complete transparency regarding how these huge dues of Rs 38,500 crore were created and sustained over the years. If the discoms were able to continue operations, make profits, expand infrastructure, and even distribute dividends during the same period when such massive regulatory assets were building up, then it becomes essential to examine how these finances were being managed and whether the liabilities being passed on to consumers are fully justified.”
Understanding Regulatory Assets
Regulatory assets are created when power distribution companies (discoms) are unable to fully recover the actual costs of power purchase, transmission, and distribution through consumer tariffs. This typically happens when governments refrain from increasing electricity tariffs due to political or populist considerations. The unrecovered gap is then recognised by the regulator as “regulatory assets” to be recovered through future tariff hikes. The current issue is under review by the Appellate Tribunal for Electricity.
