Reliance Infra-led BSES Discoms get SC nod to recover ₹28,483 cr in unpaid regulatory dues

Anil Ambani-led Reliance Group's Reliance Infrastructure today said that its New Delhi power distribution companies will recover recognised assets worth ₹28,483 crore till July 31, 2025. These dues pertain to non-cost-reflective tariffs and delayed recovery, affecting power distribution companies.

"Reliance Infra-led JV BSES, a 51:49 joint venture with the Government of Delhi, set to recover recognized regulatory assets of ₹28,483 crore till July 31, 2025. As per the Supreme Court's order, the recovery of regulatory assets is to be completed over a period of four years, from April 1, 2024, to March 31, 2028," Reliance Infrastructure says in an exchange filing.

The company says the Supreme Court on August 6, 2025, disposed of the writ petitions and civil appeals filed by Reliance Infra-led BSES Discoms, BSES Yamuna Power and BSES Rajdhani Power in 2014, where clear guidelines and directions were given for the recovery of regulatory assets.

After hearing the writ petitions at length, the SC on February 20, 2025, had reserved its judgment on the issue relating to the creation and continuation of the regulatory asset by the Electricity Regulatory Commission.

The judgment says the existing regulatory asset must be liquidated in a maximum of 4 years starting from April 1, 2024, so the regulatory asset, as approved by DERC, will be liquidated or recovered by March 31, 2028, the company said.

The SC today set out 10 sutras to examine the issue relating to regulatory assets, its position in the regulatory regime for the determination of tariff, the duties and accountability of the regulators -- the Electricity Regulatory Commissions (“ERCs”) and the powers of Appellate Tribunal for Electricity (APTEL) to avert regulatory failure.

The SC also issued nine clear directions to ERCs and APTEL in respect of cost-reflective tariff determination, creation and amortisation of regulatory assets and oversight by APTEL to monitor implementation of directions by ERCs.

The first direction says the tariff will be cost-reflective, while the second direction states that the revenue gap between the approved aggregate revenue requirement (“ARR”) and the estimated annual revenue from the approved tariff may be in exceptional circumstances.

The third direction says the regulatory asset should not exceed a reasonable percentage, based on the Electricity Rules, 2005, which prescribes 3% of the ARR as the guiding principle. Also, if a regulatory asset is created, it must be liquidated in 3 years.

The existing regulatory asset must be liquidated within a maximum of 4 years starting from April 1, 2024. Additionally, ERCs must provide the trajectory and roadmap for liquidation of the existing regulatory asset, which will include a provision for dealing with carrying costs. They must also undertake a strict and intensive audit of the circumstances in which the discoms have continued without the recovery of the regulatory asset.

APTEL will also invoke its powers can issue orders to the ERCs for the performance of their duties concerning regulatory assets.