SC Asks States, Discoms To Clear Dues By April 2028

The Supreme Court ordered on Tuesday that electricity distribution companies must liquidate all their pending "regulatory assets" by April 1, 2028.

- BHAVINI MISHRA

A two-judge apex court Bench comprising Justices P S Narasimha and Sandeep Mehta also held that fresh regulatory assets created by distribution companies (discoms) should be liquidated within three years of their creation.

"Regulatory commissions must provide the trajectory and road map for liquidation of the existing regulatory asset, which will include a provision for dealing with carrying costs. Regulatory commissions must also undertake strict and intensive audits of the circumstances in which the discoms have continued without recovery of the regulatory asset," the apex court said in its judgment.

A regulatory asset is an intangible asset created by electricity discoms to account for the gap between the price at which they purchase power and the price at which they sell it to customers, due to discounts or electricity bill waivers provided by the respective state governments.