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The Delhi High Court on Wednesday sought response from the Delhi government and others on Tata Power Delhi Distribution‘s petition challenging the Delhi Electricity Regulatory Commission (Supply Code and Performance Standards) (Seventh Amendment) Regulations, 2025), which allegedly compelled the discom to finance government infrastructure work without any provision for recovery of interest.
Tata Power Delhi, a joint venture between the Delhi government and Tata Power Co., supplies electricity in Delhi’s northern areas.
The company alleged that the amendments, as of now, effectively convert distribution licensees from regulated utilities into interest-free finances of government projects, requiring them to bear financing risk and cash-flow stress, while being legally precluded from recovering such costs through tariff or otherwise, contrary to the integrated statutory scheme of the Electricity Act, 2003.
While introducing a milestone-based payment mechanism, the Delhi Electricity Regulatory Commission (DERC) had simultaneously deleted all provisions relating to interest during execution and compensatory interest for delayed payments by government departments, alleged Tata Power Delhi.
The petition, filed by SKV Law Offices, stated that as a consequence, distribution licensees were compelled to deploy substantial capital from their own balance sheets for execution of government work, while being legally precluded under the prevailing tariff framework from recovering any interest, time value of money, or carrying cost.
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