The Delhi Government has directed the Comptroller and Auditor General (CAG) to conduct a strict and intensive audit of the capital's three power distribution companies over their failure to recover regulatory assets. The order, issued by the Department of Power, comes after the completion of legal procedures mandated under the CAG Act and follows a Supreme Court judgment from August 6, 2025.
Scope of the Audit
The audit will cover BSES Rajdhani Power Ltd. (BRPL), BSES Yamuna Power Ltd. (BYPL), and Tata Power Delhi Distribution Ltd. (TPDDL). It will examine the circumstances surrounding the non-recovery of regulatory assets and all related matters for a comprehensive review. According to the order, all concerned authorities and the three discoms must extend full cooperation and provide all records, information, and assistance required by the CAG or its authorised officers.
Legal Background and Supreme Court Directions
The government stated that the move stems from the Supreme Court's August 6, 2025, judgment, which directed a "strict and intensive audit" into the issue of unrecovered regulatory assets of Delhi's electricity distribution companies. An earlier notification issued in March 2026 was set aside by the Appellate Tribunal for Electricity (APTEL) because the mandatory consultation process under Section 20(3) of the CAG Act had not been followed. Fresh notices were then issued to the three discoms, which were given an opportunity to submit written representations and present their views during a personal hearing on June 22, 2026.
Legal Challenges and Final Decision
The companies challenged the notices before the Delhi High Court, but the court dismissed the petition as premature, allowing the competent authority to take an independent decision. After considering the submissions of the distribution companies, the Supreme Court's directions, and the recommendations of the Delhi Cabinet, the Lieutenant Governor concluded that the objections raised by the discoms were "not sufficient to resist the entrustment of audit to the CAG."
Minister's Reaction
Reacting to the development, Delhi Power Minister Ashish Sood termed the government's decision a landmark step towards reforming the power sector. "The formal order for the CAG audit of Delhi's DISCOMs is a historic moment for transparency, accountability and governance reforms in Delhi's power sector. More importantly, it is a victory for every electricity consumer and every honest taxpayer of Delhi," Sood said. He highlighted that the people of Delhi have the right to know how regulatory assets worth nearly Rs 38,000 crore kept growing and who benefited while this burden continued to hang over citizens. Sood asserted that the audit is not just about looking into the past but is the foundation for governance reforms, with success measured by corrective actions, stronger regulation, and greater accountability. He called for cooperation from all stakeholders, stating, "We have followed every legal process with complete transparency, and now we expect full cooperation from all the DISCOMs. With the blessings of the people of Delhi, we are committed to cleaning up the power sector and building a system that is transparent, accountable and works only in the public interest."
Timeline for Completion
The order states that the audit should preferably be completed within three months from the date of communication of the order, although the CAG may extend the timeline depending on the scope and complexity of the exercise.
