SC stay procedural, not clean chit to discoms: Sood

Delhi Power Minister Ashish Sood called a Supreme Court order staying an order of his department for CAG audit of power discoms in the city as “procedural” in nature and not a “clean chit” to the power distribution companies.

The Delhi Government had ordered a CAG audit of power discoms against the backdrop of a staggering Rs 38,500 crore accumulated over the years as Regulatory Assets (RA) that are to be recovered from consumers.   The Court, while passing the order, said that the legality of the power regulator Delhi Electricity Regulatory Commission's (DERC) decision to appoint the CAG gives rise to questions for a judicial determination. “The interim order passed by the Supreme Court is a procedural order intended to preserve the status quo until the legal issues are examined in detail,” Sood said in a statement.

It is neither a final verdict on the merits of the case nor a clean chit to the private power distribution companies, he stated.  The Court has fixed the matter for hearing on July 15, where the legal framework governing the audit mechanism will be examined. The Delhi Government has proceeded throughout this matter with complete honesty, transparency and in accordance with law, Sood said.

“We are fully prepared to place our case before the Supreme Court on 15 July and demonstrate why an independent and rigorous CAG audit is necessary to safeguard the interests of Delhi's electricity consumers and taxpayers,” he said.

The power minister said that the Supreme Court has “recognised” that important legal questions concerning transparency and accountability in Delhi's power sector deserve detailed consideration. An interim stay is not a victory for the discoms. The Court has not held that the CAG audit is illegal and has simply preserved the existing position while examining the legal framework.

“Significantly, the Court has also directed that liquidation of the Regulatory Assets will remain stayed until further orders. We welcome this protection extended by the Hon'ble Supreme Court in public interest,” Sood said.  This is a “major relief” for the people of Delhi because it prevents immediate implementation of a mechanism that could have ultimately translated into a massive financial burden on electricity consumers, he said.

The “resistance” to the audit raises serious questions, Sood said and added that the urgency with which discoms have attempted to prevent the CAG audit raises obvious questions. “If there is nothing to hide, there should be no objection to an independent public audit conducted under constitutional supervision,” he said.

Delhi Government is fighting to protect Delhi's consumers, said the minister and added it cannot allow a potential burden of nearly Rs 38,500 crore to be transferred onto the people of Delhi through higher tariffs and surcharges without strict and independent financial scrutiny.