Delhi Government Plans CAG Audit Of Discoms Over ₹38,500 Crore Regulatory Assets

The Delhi government is considering using Section 108 of the Electricity Act, 2003, to direct the Delhi Electricity Regulatory Commission (DERC) to conduct an audit of power distribution companies through the Comptroller and Auditor General (CAG). The move is aimed at verifying the claims made by private discoms that they have accumulated regulatory assets worth nearly ₹38,500 crore.

Regulatory assets are costs incurred by discoms that are not immediately recovered through electricity tariffs. These costs are generally passed on to consumers later through special surcharges added to electricity bills. The Delhi government now wants to examine whether these claims are genuine and whether consumers should bear the burden of paying such a huge amount in the future.

Delhi Power Minister Ashish Sood said the government is committed to protecting citizens from unnecessary financial pressure. He questioned how private discoms continued to function smoothly and even reported profits while simultaneously claiming massive unpaid dues. According to him, the companies must clearly explain how they managed their operations despite reporting such high regulatory assets.

The minister also said the government intends to remove what he described as corruption during the previous tenure of the Aam Aadmi Party government. He pointed out that electricity tariffs in Delhi remained unchanged during the ten years of AAP rule beginning in 2015, even as regulatory assets kept increasing.

Under Section 108 of the Electricity Act, state governments have the authority to issue binding policy directions to electricity regulators in matters involving public interest. By invoking this provision, the Delhi government may ask the DERC to strengthen the audit process and ensure complete transparency regarding the financial position of the discoms.

The issue has also gained attention due to recent legal developments. Earlier, an attempt by the DERC to conduct a CAG audit of discoms was rejected by the Appellate Tribunal for Electricity. However, the matter later reached the Supreme Court. On August 6, 2025, the apex court directed the DERC to liquidate the accumulated regulatory assets of the discoms. At the same time, the court ordered a detailed audit into how the companies continued operating without recovering those dues over the years.

Following the Supreme Court’s direction, the DERC has already floated a tender to appoint a CAG-empanelled chartered accountancy firm to carry out the audit. The Delhi government now plans to further reinforce the process to ensure accountability and protect consumers from any unfair increase in electricity-related charges.