Delhi Orders CAG Audit of Power Discoms Over ₹38,500 Cr Regulatory Assets

The Delhi government on Wednesday directed the Comptroller and Auditor General to audit the capital's three power distribution companies. The trigger: ₹38,500 crore in regulatory assets that have piled up over years and are meant to be recovered from consumers.

Chief Minister Rekha Gupta's cabinet approved the audit at a June 29 meeting. The order came after the Delhi High Court on June 22 declined to block the move, dismissing a petition from BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd. Power Minister Ashish Sood called it a "historic moment for transparency."

Regulatory assets are deferred costs discoms incur when fuel prices shift. They represent the gap between the cost of supplying power and what tariffs and subsidies cover. That gap has been rolled forward for more than a decade because electricity rates in Delhi have not changed.

The outstanding balance breaks down this way: BRPL's share is ₹19,174 crore. BYPL's is ₹12,333 crore. Tata Power Delhi Distribution, the third discom, carries ₹7,046 crore. The total has reached roughly ₹38,500 crore.

The audit is supposed to finish within three months of the order's communication. The CAG can extend that timeline. This would be the first CAG audit of Delhi's power discoms since the sector was privatized in 2002. A previous attempt by the AAP government was blocked by the High Court in 2015.

The Supreme Court in August 2025 called for a strict audit of how the discoms accumulated these assets without recovering them. The CAG gave in-principle approval in January, subject to the Lieutenant Governor's authorization under Section 20(1) of the CAG Act. Notices were sent to the discoms on June 6, inviting their representations.

BRPL declined to comment, saying the matter is sub judice. The other discoms did not respond.

Sood said the audit will answer who benefited while the burden grew. He accused the previous AAP government of protecting the system instead of examining it. "What they failed to do in ten years, our Government has initiated within a few months," he said.

For the discoms, the audit introduces regulatory uncertainty. If it finds mismanagement or improper cost recovery, the government could force write-offs, adjust tariffs, or impose penalties. That would hit the parent companies: Tata Power, which holds 51% of TPDDL, and Reliance Infrastructure, which backs the BSES joint ventures. Both stocks could face pressure as the audit progresses.

What would reduce the risk: a clean audit that confirms the regulatory assets were properly incurred and merely awaiting tariff adjustments. That would allow the discoms to continue recovering the surcharge from consumers.

What would make it worse: findings of inflated costs, poor governance, or deliberate under-recovery. That could trigger regulatory action, legal liability, and a potential hit to the companies' balance sheets. The Delhi government has already signaled it wants accountability.

The next concrete marker is the audit's completion, expected within three months. The CAG may ask for more time. Until then, the discoms operate under a cloud. Consumers, meanwhile, face the possibility that the ₹38,500 crore burden will eventually land on their bills – or be written off at the companies' expense.