Supreme Court’s Big Verdict: Electricity Bills Likely to Rise Soon

Consumers in the national capital, Delhi, may soon face a jolt in their electricity bills. The Supreme Court has conditionally allowed power distribution companies (discoms) to increase tariffs in order to recover long-pending dues. However, the court has made it clear that any hike must be reasonable and affordable for consumers.

Electricity Bills May Rise in Several States

The apex court has directed the Delhi Electricity Regulatory Commission (DERC) to draft a clear roadmap detailing when, how, and by how much the tariffs will be increased. Importantly, the impact of this decision will not remain limited to Delhi alone. Several other states across the country could also see a rise in electricity prices as a consequence of this ruling.

Financial Burden on Consumers

The case pertains to the pending dues of power distribution companies that have remained unresolved for several years. The court has ordered that these pending regulatory assets must be liquidated within the next four years. In essence, the recovery of these dues will now be passed on to consumers, directly affecting their electricity bills. The court observed that prolonged delays in clearing these dues eventually burden common consumers. It also noted that regulatory commissions and the Appellate Tribunal for Electricity (APTEL) failed to take timely decisions, leading to this prolonged issue.

Strict Action Expected Post Court’s Order

Discoms have argued that they are unable to recover the full costs of purchasing and supplying electricity, leading to financial losses, which are categorized as regulatory assets. Following the court’s order, these losses will now gradually be recovered from consumers. In Delhi, these pending dues have accumulated over the last 17 years, amounting to nearly ₹20,000 crore. In Tamil Nadu, the pending amount has surged to ₹87,000 crore as of 2024. These staggering figures indicate that electricity prices are likely to increase across the board—for both residential and industrial consumers.

Significant Impact on Common Households

While the Supreme Court’s decision offers relief to distribution companies, it could significantly impact consumers’ expenses. It now remains to be seen how DERC and other state regulatory commissions implement the roadmap and prepare consumers for the inevitable tariff hikes.