HERC Grants Haryana’s First Parallel Distribution Licence: Eleven Power in Gurugram and Nuh

 

A detailed analysis of HERC Petition No. 30 of 2026, order dated 19 October 2026

1. Overview

On 19 October 2026, the Haryana Electricity Regulatory Commission (HERC), sitting at Panchkula, granted a 25-year parallel distribution licence to Eleven Power Private Limited for the Gurugram and Nuh revenue districts. This is the first time a second distribution licensee has been allowed to operate in the same area as a state-owned discom in Haryana.

The Commission consisted of Shri Mukesh Garg (Officiating Chairman) and Shri Shiv Kumar (Member). Hearings were held on 26.05.2026, 08.07.2026, 03.09.2026 and 28.09.2026. The 457-page order accepts most of the petitioner’s case and the Expert Committee’s recommendations. It rejects the incumbents’ objections that eligibility must include a built network, prior experience, or protection of the incumbent’s revenue. It also imposes a long list of licence conditions.

2. The Parties

Petitioner: Eleven Power Private Limited, 99.99% owned by SAS Fininvest LLP, part of the Eleven (formerly SAS) Group led by Mr. Sunil Sachdeva. The group’s interests include Medanta (healthcare), SV Creditline (retail finance), and clean energy and infrastructure ventures. The company was incorporated on 06.06.2025 as “Veyora Infra Private Limited” for real estate. It was renamed Eleven Power on 24.02.2026, and its objects were changed to the electricity business on 20.04.2026.

Consortium partners (under an MoU dated 11.05.2026):

• Vision India Services: meter reading, billing, collection, O&M, and work for Tata Power’s Odisha discoms and for UHBVNL, DHBVNL and HVPNL.
• HEC Infra Projects Ltd: EHV substations up to 220 kV, SCADA, underground cabling, and a 360 MWh BESS project.
• Advait Energy Transitions Ltd: turnkey EPC, MVCC conversion, and RDSS packages in Gujarat.

Respondents:

• DHBVNL, the incumbent for the area.
• UHBVNL, the northern discom.
• HVPNL, the State Transmission Utility and SLDC.

Objectors: Eleven intervenors opposed the petition, including former minister Sampat Singh, EEFI, AIPEF, the Haryana Power Engineers’ Association, the Kisan Sabha, CPI(M), employee unions and RWAs. Thirty-two supported it, mostly industrial and commercial consumers, hotels, developers, farmers’ associations and the Gurgaon Industrial Association.

3. What Was Applied For

The petition was filed under Sections 14 and 15 of the Electricity Act, 2003. It was read with the HERC Licensing Regulations 2004 and the Distribution Licence Rules 2005, as amended in November 2022. The proposed area covers:

• Gurugram and Manesar Municipal Corporations;
• Sohna and Pataudi Municipal Councils and Farrukhnagar Municipal Committee;
• the Nuh, Punhana, Firozepur Jhirka and Tauru Municipal Committees.

Investment plan:

• Total capex is ₹4,716.73 crore over FY 2026-27 to FY 2030-31. Of this, ₹4,650.37 crore is for wires and ₹66.36 crore for supply.
• Funding is 70:30, with ₹1,415.02 crore equity and ₹3,301.71 crore debt.
• Annual capitalisation is ₹292.85 crore, ₹463.29 crore, ₹1,072.33 crore, ₹1,306.42 crore and ₹1,581.84 crore across the five years.
• The network is 33 kV-dominant: about 205 km of 33 kV lines and 1,020 km of 11 kV lines, 36 new 33/11 kV substations, and 2,002.5 MVA of transformation capacity against projected demand of about 1,067 MW by FY 2030-31.
• The design uses underground ring networks with RMUs, N-1 redundancy, an 80% loading cap, compact gas-insulated substations, SCADA/ADMS, and prepaid smart meters.
• About ₹304.37 crore (about 6.5%) is earmarked for Nuh, whose share of connected load is under 5%.

Power procurement: 80% renewable (FDRE plus transitional Green Day-Ahead Market purchases, with BESS) and 20% thermal. FDRE is priced at ₹4.40/kWh, GDAM at about ₹3.80/kWh escalating, and thermal at about ₹5.00/kWh. Power purchase cost rises from ₹273 crore to about ₹1,398 crore over the period.

Market assumptions:

• Existing-consumer switchover is 2.5% rising to 4% by FY 2030-31.
• The petitioner’s share of new load is 25% rising to 40%.
• Total sales are about 3.75% of licence-area sales in year one and 15.21% by FY 2030-31.
• Distribution losses fall from 5.80% to 5.20%.

4. Procedural History

1. 26.05.2026, first interim order. HERC impleaded the three utilities. It directed the petitioner to file:
   • a HVPNL NOC and a Ministry of Defence NOC;
   • proof of newspaper notice;
   • a justification for using market value rather than book value of the promoter’s net worth, plus a debt-equity capitalisation plan;
   • an anti-cherry-picking implementation plan, a USO affidavit, operational modalities and a Migration Protocol.
2. 03.07.2026, compliance filing. The petitioner submitted all of the above, a signed MoU (the original was unsigned) and a revised key-personnel list.
3. 04–05.07.2026, replies. DHBVNL, UHBVNL and HVPNL objected, and the petitioner filed rejoinders.
4. 08.07.2026, public hearing, then the interim order of 09.07.2026. HERC constituted an Expert Committee: Mr. Alok Nigam (IAS retd., former CMD of UHBVNL and HVPNL) as chair, Er. R.K. Sharma (ex-MD HPSEBL) and Mr. B.P. Mahapatra (ex-Director Finance in several state PSUs). It worked from 13.07.2026 and reported on 07.08.2026, recommending the licence subject to Schedules A to D.
5. 30.07.2026, additional documents. The petitioner filed nine items:
   • an MoU addendum introducing a six-year lock-in;
   • Code of Conduct undertakings from the promoter and the consortium partners;
   • a legal opinion by Dr. Justice D.Y. Chandrachud, former CJI;
   • special-purpose financial statements of SAS Fininvest LLP;
   • the partners’ undertaking, a no-transmission-licence undertaking, key-personnel consent declarations and a 360 One solvency certificate.
6. IAs 29 and 30 of 2026. The discoms sought a hearing and copies of the report. HERC sent the report to the parties, took comments, and heard the matter on 03.09.2026. It then reserved the order and allowed the 43 timely intervenors to comment by 15.09.2026.
7. 28.09.2026, High Court direction. Following the Punjab and Haryana High Court judgment in CWP 30993 of 2026, HERC heard the Haryana Power Engineers’ Association through Senior Advocate Ashwani Talwar. It found the objections substantially similar to the discoms’. AIPEF was offered a hearing and declined.

Public comments: 43 intervenors filed within the statutory 30 days, as Section 15(2) requires. Another 534 filed late and were not considered. HERC called the contents largely repetitive and noted that the process is consultative, not adversarial.

5. Preliminary Rulings

Expert Committee: The preliminary objection to the committee was rejected. HERC relied on Regulation 30 of the Conduct of Business Regulations 2019 (reference of issues to experts) and Regulation 11. The committee is recommendatory only, and the Commission retains full adjudicatory power.

Additional documents: The 30.07.2026 documents were taken on record. They were filed during an ongoing regulatory examination, not after a trial closed. The respondents received them and replied, so no prejudice was shown. HERC added that Commissions are not bound by CPC technicalities.

6. Findings on the Ten Issues

Issue 1: Phased rollout, USO and cherry-picking: Consistent with the Act

• HERC relied on APTEL’s 11.03.2026 judgment in MCGM (BEST) v. MERC, Appeal 279 of 2017. That judgment holds that developing a network is a continuing duty under Section 42, that no timeline is fixed, and that phased development is permissible.
• A fully built network cannot be a pre-condition to a licence. A non-licensee cannot lawfully lay a network, given Section 12. Requiring duplication at the outset would also cause “catastrophic capital overbuild”.
• No cherry-picking found: Nuh is in every phase, from FY 2026-27. Its capex share exceeds its load share, and the sales mix mirrors the incumbent’s. The 2.5% switchover looked reasonable, since only about 1.5% of Reliance’s consumers moved to Tata Power in Mumbai initially.
• India Power Corporation (HERC/PRO-08 of 2014) was distinguished. That applicant had an incomplete, under-scaled plan and inadequate net worth.
• HERC accepted the Gurugram City deferral, which depends on HVPNL’s 33 kV backbone. It directed the petitioner to expedite that work.
• HERC rejected the discoms’ ₹11,397.75 crore (network) and ₹18,535.58 crore (with land) estimates as replicating legacy design. It accepted that land on lease is a revenue expense.
• Working-capital margin money is to follow lender requirements, and letters of credit for power purchase are a revenue item.

Safeguards imposed include:

• Supply Code timelines apply only to areas where the network is complete.
• Non-discriminatory connection procedures and published fees.
• Periodic connection logs and quarterly performance benchmark reports.
• A phase-1 implementation plan within 60 days of grant, and later phases 90 days before work starts.
• A justification for the Gurugram City sequencing, and no unjustified deferral of any division.
• N-1 redundancy and an 80% loading cap; SAIFI/SAIDI reporting.
• Half-yearly progress reports and unbundled accounts.
• A Migration Protocol petition within 60 days.

Issue 2: Statutory requirements: Satisfied

Capital adequacy. The promoter SAS Fininvest LLP’s market-value net worth was ₹4,215 crore, ₹3,728 crore and ₹4,085.60 crore across the three years, against the ₹1,415 crore equity requirement. Its book value is only ₹94.95 crore. HERC accepted market value, reasoning that:

• Section 2(57) of the Companies Act does not govern an LLP, and Rule 3(2) expressly counts the promoter’s resources.
• For liquid listed shares, realisable value is a realistic measure.

Supporting facts it noted:

• Authorised capital was raised from ₹100 crore to ₹1,500 crore.
• ₹91 crore of phase-1 equity has been infused (requirement ₹87.86 crore), funded by the promoter’s sale of 20 lakh Global Health shares for about ₹252.5 crore.
• Partners undertook to earmark at least ₹1,500 crore, free of charge.
• Capital-gains and block-sale haircuts still leave about ₹3,000 crore.

Creditworthiness. Two ₹1,000 crore solvency certificates (IndusInd Bank and 360 One Prime) were held to be independent, since 360 One confirmed non-overlap. IndusInd also gave an in-principle ₹205 crore sanction covering all of phase-1 debt. HERC applied a “progressive mobilisation” standard and said the full five-year debt need not be committed at the licensing stage.

Minimum area. The Explanation to Rule 3(2) (Nov 2022) reads “either a Municipal Corporation… or three adjoining revenue districts…”. HERC held it disjunctive and a floor, not a ceiling. The area includes the entire Gurugram and Manesar Municipal Corporations. Nagina is in the rollout plan, and Hathin (Palwal) and Sikri (Faridabad) lie outside both districts. HERC took note of the Chandrachud opinion, but as persuasive reasoning only.

Code of Conduct. Rule 4 tests non-disqualification, not three years of operating history. Regulation 4(1)(g)(II) also expressly contemplates applicants incorporated for less than three years. Undertakings were filed by the petitioner, the promoter and the consortium partners, and no disqualification or winding-up petition was found.

Conditions:

• Earmarked resources of at least ₹1,500 crore (reduced by funds actually infused) must be maintained, with an annual CA certificate.
• Equity must be infused at least three months before each capex milestone, with matching debt closure, and the first-year working-capital equity must be funded.
• Prior HERC approval is needed for any change in control, merger, major shareholding change, partner change in SAS Fininvest LLP, or constitutional amendment.

Issue 3: Technical, managerial and institutional capacity: Substantially demonstrated

• Prior distribution experience is not a statutory precondition, since requiring it would mean only incumbents could ever apply.
• Form-1 permits consortium experience to be furnished. HERC found the MoU binding and enforceable. It has a ₹5 crore forfeitable deposit per member, a six-year lock-in, a six-month notice period, and a bar on exit until a replacement is in place, and it includes governing law and arbitration provisions.
• HERC departed from the Expert Committee here. It held that no separate “legally enforceable Consortium Agreement” is needed, and it rejected the demand to implead the consortium partners.
• Key personnel: 10 had filed consent declarations and 2 are already on the rolls. HERC required a formal organisation, KMPs and appointment letters before supply starts. It also required prompt notice of changes in the Responsibility Matrix.

Issue 4: NOCs and approvals: Only the Defence NOC is needed

• No STU or other NOC is a pre-condition to a licence. HVPNL itself said its studies follow a licence, and GNA is applied for by the STU on behalf of licensees.
• The Ministry of Defence NOC under Section 15(2)(ii) was filed and satisfied the requirement.
• Before commercial energisation, the licensee must:
  • obtain connectivity, GNA and clearances at least 3 months before commencement;
  • sign interconnection agreements and SLDC scheduling protocols;
  • carry out load-flow, short-circuit, protection and security studies;
  • comply with CEA regulations and the Haryana Grid Code.

Issue 5: Long-term PPAs: Not a pre-requisite

• An unlicensed entity cannot run Section 63 bidding. The 80:20 mix is acceptable subject to approval under Section 86(1)(b).
• Short-term procurement does not bypass the Commission’s oversight.
• Stranded capacity is not a ground for refusal.
• HERC supported the “Green Gurugram and Nuh” initiative. BESS capex recovery will be assessed later on cost-benefit and prudence.

Issue 6: Consumer Migration Framework: Condition precedent to switch-over, not to grant

• Arrears attach to premises as well as consumers, and defaulters and theft-case consumers are barred unless stayed by a competent forum.
• Undisputed dues must be cleared or secured, and a “bill-and-remit” mechanism applies to residual dues.
• The discoms’ proposed embargo on migration by independent-feeder consumers was rejected. There shall also be no restriction on new connections.
• Safeguards:
  • a Migration Protocol petition within 60 days of grant;
  • switch-over against joint or verifiable final readings;
  • disconnection only after successful energisation, with no dual energisation;
  • a data-exchange interface between the two licensees.

Issue 7: CSS and Additional Surcharge: Do not apply to migrated consumers; the issue is deferred

• Sections 42(2) and 42(4) apply only to open access. HERC’s 17.06.2020 order in HERC/PRO-11 of 2017 (Northern Railways) was distinguished as limited in context.
• HERC acknowledged that the incumbent may lose cross-subsidy and surcharge revenue. It left treatment of that loss to ARR and true-up proceedings.
• The licensee must comply with future orders on legacy FPPAS, CSS and additional surcharge.

Issue 8: Financial implications: Not examinable as threshold grounds

Tariff impact, cross-subsidy erosion, stranded costs and deferred FSA are post-grant regulatory matters under Sections 61–65 and 86(1)(b). HERC directed that stranded-cost and tariff claims be adjudicated in regular ARR proceedings, and that the licensee comply with FPPAS, CSS and additional surcharge orders.

Issue 9: Impact on the incumbent: No material direct impact expected

• Migration of 2.5–4% of existing sales is bounded, and the incumbent’s demand is growing.
• The “natural monopoly” and duplication objection is an objection to the statute itself, because the Sixth Proviso contemplates a second licensee’s own network.
• The loss trajectory (5.80% falling to 5.20%) was found realistic and will be monitored as a licence condition.
• Reliability, resilience and technical concerns can be handled through licence conditions.

Issue 10: Pilot Project Belt: Must comply

• In Gurugram Sectors 58–115, new connections must follow the 220/33/0.4 kV architecture notified on 27.09.2023.
• The petitioner’s own undertaking becomes an enforceable licence condition, verified before supply starts.
• Existing 11 kV consumers keep 11 kV supply after migration.

7. The Respondents’ Core Objections and Why They Failed

Objection	HERC’s response
Petitioner is a new shell with no experience	No statutory experience requirement; Reg. 4(1)(g)(II) permits new entities; consortium experience allowed under Form-1
Net worth must be book value	Companies Act definition not applicable to an LLP; market value is realistic for liquid listed shares
Capex understated (₹11,398–18,536 crore)	Phased, efficient design; capex should not replicate the incumbent’s legacy network
Phased rollout breaches Section 43	APTEL’s BEST judgment; the Section 43 provisos allow time for extensions
Cherry-picking	Nuh in Phase I, a capex share above its load share, and a similar sales mix
Cross-subsidy and stranded-cost loss	Tariff-jurisdiction matter after grant; not a ground for refusal
Schedule A conditions are really conditions precedent to grant	Eligibility and implementation are distinct stages; conditions imposed under Section 16

8. Notable Features of the Order

• Departures from the Expert Committee:
  • HERC found the existing MoU legally binding, with no new agreement required.
  • Working-capital equity is tied to lender requirements.
• Reliance on APTEL’s 2026 judgment over the older Noida Power (2011) position that phased development was impermissible. HERC noted that the Noida Power applicant had negative net worth and unaudited accounts.
• Consultative approach: the Commission said the public process is “essentially consultative” and should not run indefinitely through repeated replies and hearings.

9. Non-Precedent Clause and Context

HERC stated that the grant is not a precedent and creates no vested right for any other applicant in Haryana. Every future application will be decided on its own facts, including the performance of this licensee.

The Commission put weight on pending connection requests:

• DHBVNL: 1,08,590 applications, 1,642.542 MW (as on 01.10.2025).
• UHBVNL: 20,603 applications, 770.407 MW (as on 30.09.2025).
• Total: 2,412.949 MW pending, against 2,403.862 MW on 01.04.2025.

10. Next Steps

1. The petitioner must convey willingness to accept the licence within one week, including its conditions (draft Licence No. DRS-3 of 2026, Annexure G).
2. HERC will then publish Form 6 in one English and one Hindi daily in Gurugram and Nuh (Annexure H).
3. Within 60 days of grant, the licensee must file the phase-1 implementation plan and the Migration Protocol petition.
4. Before supply can start, the licensee must obtain GNA and connectivity, sign interconnection and SLDC agreements, complete system studies, and establish its organisation and KMPs. It must also get PPAs approved under Section 86(1)(b).
5. The discoms or intervenors may challenge the order before APTEL, since they raised extensive objections.

11. Why It Matters

This order sets a template for how Indian regulators may treat parallel licensing. It separates eligibility (capital adequacy, creditworthiness, code of conduct, minimum area) from implementation (network, transmission access, PPAs, migration). It accepts phased USO compliance and promoter-backed capital adequacy using market value. The key practical outcomes will be:

• how the incumbent’s stranded costs and cross-subsidy loss are handled in later ARR proceedings;
• whether the licensee meets the Nuh and Gurugram City rollout milestones;
• how actual switchover compares with the projected 2.5–4%.

This article summarises the Commission’s order and is not legal advice.