Tata Power Moves Delhi High Court Against DERC Rules Forcing DISCOMs To Finance Govt Works Without Interest

The Delhi High Court today issued notice on a petition filed by Tata Power Delhi Distribution Ltd. challenging Delhi government's recent amendments to the Delhi Electricity Commission Regulations inasmuch as it compels distribution companies to finance Government infrastructure works, without allowing recovery of interest, time value of money, or compensatory interest for delayed payments.

The company supplies electricity in Delhi's northern areas. It claims that earlier, the execution of deposit works for all categories of consumers, including Government entities, was structured on a "full-deposit basis", to ensure that such works remain tariff-neutral and do not result in any direct or indirect burden on the Annual Revenue Requirement.

However, with the 2025 amendment, the Electricity Commission has deleted all provisions relating to interest during execution and compensatory interest for delayed payments by Government Departments.

"As a consequence, Distribution Licensees are compelled to deploy substantial capital from their own balance sheets for execution of Government works, while being legally precluded under the prevailing tariff framework from recovering any interest, time value of money, or carrying cost. The Impugned Amendment thus shifts the entire financing risk onto regulated utilities without any corresponding recovery mechanism," the plea states.

It adds, "The Impugned Amendment, as it stands, effectively converts Distribution Licensees from regulated utilities into interest-free financers of Government projects, requiring them to bear financing risk, statutory MSME payment obligations, 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."

The plea also claims that the amendment creates a discriminatory classification between Government Departments and private consumers inasmuch as "While private consumers are required to deposit the full estimated cost upfront prior to execution of works, Government entities are afforded preferential instalment-based treatment, with the financial burden shifted entirely onto Distribution Licensees, without any rational nexus to the object of the Act."

A division bench of Chief Justice DK Upadhyaya and Justice Tejas Karia has issued notices to the Delhi government and the Delhi Electricity Regulatory Commission, and sought their responses within 6 weeks.

The matter is now listed on April 13.

The plea is filed by Shri Venkatesh, Ashutosh K Srivastava, Mohit Mansharmani and Ananya Dutta (Advocates).

Case Title: TATA POWER DELHI DISTRIBUTION LIMITED V/s DELHI ELECTRICITY REGULATORY COMMISSION & ANR.

Case No.: W.P.(C)-1138/2026