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Reliance Infrastructure's power distribution arms, BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, have received Supreme Court approval to recover INR 21,413 crore in regulatory assets over the next four years. This decision came as part of a broader directive where Delhi's three private discoms, including Tata Power Delhi Distribution Ltd, are allowed to recover a total of INR 27,200.37 crore. The court's judgment settles a decade-long dispute, mandating Electricity Regulatory Commissions to not only set recovery roadmaps but also audit the reasons behind the prolonged deferral.
Reliance Infrastructure has confirmed that its power distribution companies BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd will recover INR 21,413 crore in regulatory dues over the next four years, following a Supreme Court ruling delivered earlier this week. These two discoms collectively supply electricity to nearly 5.3 million consumers across Delhi. Advertisement
In a regulatory filing, the company stated that the court order laid out specific guidelines for recovering regulatory assets. These assets refer to deferred revenue gaps approved by the Electricity Regulatory Commissions (ERCs) for future recovery through tariffs.
The Supreme Court has directed that the total outstanding regulatory assets including accumulated carrying costs amounting to INR 27,200.37 crore must be liquidated within a three-year timeframe. This total includes INR 12,993.53 crore for BSES Rajdhani Power Ltd, INR 8,419.14 crore for BSES Yamuna Power Ltd, and INR 5,787.70 crore for Tata Power Delhi Distribution Ltd, as of March 31, 2024.
This ruling comes after RInfra's subsidiaries filed civil appeals and a writ petition back in 2014, raising concerns over what they described as "non-cost reflective tariff structures, unlawful creation of regulatory assets, and the prolonged non-clearance of these dues." The matter had been pending before the court for over a decade.
The Supreme Court bench heard all relevant stakeholders, including state governments and electricity regulators, before delivering the verdict. As per the ruling, ERCs have now been instructed to provide a concrete roadmap for the liquidation of these regulatory assets. The roadmap must account for carrying costs and ensure a comprehensive audit of the factors that led to such prolonged delays in asset recovery.
The court also emphasized the need for tighter regulatory oversight to avoid similar situations in the future. ERCs will now be held accountable for monitoring the financial health of discoms and ensuring that tariff structures are cost-reflective.
This decision marks a significant shift in the regulatory landscape, bringing long-overdue clarity to Delhi's power sector financing and offering relief to discoms that had been struggling under the weight of deferred dues.
Source PTI
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