HERC Petition No. 30 of 2026 | Order dated 19 October 2026 | Haryana Electricity Regulatory Commission, Panchkula
Introduction
The Haryana Electricity Regulatory Commission (HERC), Panchkula, passed an important order dated 19 October 2026 in HERC Petition No. 30 of 2026, granting a parallel distribution licence to Eleven Power Private Limited for the Gurugram and Nuh revenue districts, subject to the conditions specified in the order.
The proceedings concerned the application of Eleven Power Private Limited for a distribution licence under Sections 14 and 15 of the Electricity Act, 2003, read with the applicable licensing rules and regulations. The application raised significant questions concerning the eligibility of a newly incorporated company, capital adequacy, creditworthiness, technical and managerial capability, phased network development, universal service obligation, consumer migration, cross-subsidy, stranded costs and the financial consequences for the incumbent distribution licensees.
Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL) and Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) jointly opposed the application through detailed replies, objections and written submissions. Their principal contention was that although the Electricity Act permits more than one distribution licensee in the same area, the existence of such a statutory possibility does not automatically entitle every applicant to a licence. According to the discoms, the applicant was required to establish compliance with all applicable statutory, financial, technical and public-interest requirements before the licence could be granted.
The Commission considered these objections alongside the applicant’s submissions, the report of the Expert Committee, comments received from intervenors and the applicable legal framework. It ultimately rejected the principal objections to the grant, accepted phased network development subject to safeguards, and left several financial and regulatory consequences for subsequent proceedings.
This article examines the principal objections advanced by DHBVNL and UHBVNL, the Commission’s response to those objections, and the issues that may remain relevant during implementation and subsequent regulatory proceedings.
1. Background of the Proceedings
Eleven Power Private Limited filed its application seeking a distribution licence for the proposed area covering Gurugram and Nuh. The application was considered under Sections 14 and 15 of the Electricity Act, 2003, read with the applicable HERC licensing framework and the Distribution of Electricity Licence Rules, 2005, as amended.
The application proposed phased investment in the distribution network, procurement of electricity through a combination of renewable and thermal sources, and the migration of existing consumers as well as the connection of new consumers.
The proposed capital expenditure was approximately ₹4,716.73 crore over FY 2026-27 to FY 2030-31. The proposed funding structure comprised approximately ₹1,415.02 crore in equity and ₹3,301.71 crore in debt.
The proposed network included 33 kV and 11 kV infrastructure, new 33/11 kV substations, transformation capacity, underground distribution networks, smart metering and system-monitoring arrangements. The applicant also proposed an electricity procurement mix comprising approximately 80% renewable power and 20% thermal power, subject to the applicable regulatory requirements and approvals.
DHBVNL, as the incumbent distribution licensee for the relevant area, raised objections concerning the adequacy of the proposed investment, the extent of the planned network, the financial implications of consumer migration and the effect on its existing assets and power purchase commitments. UHBVNL also joined the objections concerning the interpretation of the applicable licensing framework and the consequences of granting a parallel distribution licence.
HVPNL, the State Transmission Utility and State Load Despatch Centre, was also impleaded in the proceedings. Its transmission and grid-related concerns formed part of the broader examination of the proposed licence.
2. Proceedings Before HERC and Constitution of the Expert Committee
The Commission considered the matter through hearings held on 26 May 2026, 8 July 2026, 3 September 2026 and 28 September 2026.
During the initial proceedings, HERC directed the applicant to furnish additional information and documents, including the relevant no-objection certificates, proof of public notice, a justification for the proposed valuation of the promoter’s net worth, the capitalisation plan, and details concerning phased implementation, the universal service obligation and consumer migration.
The applicant subsequently filed compliance documents and additional material. DHBVNL, UHBVNL and HVPNL placed their objections on record, and the applicant filed responses.
Following the hearing on 8 July 2026, the Commission constituted an Expert Committee to examine the proposal. The Committee was chaired by Mr. Alok Nigam, IAS (Retd.), former CMD of UHBVNL and HVPNL, and included Er. R.K. Sharma, former Managing Director of HPSEBL, and Mr. B.P. Mahapatra, former Director (Finance) in several State public-sector undertakings.
The Expert Committee commenced its work on 13 July 2026 and submitted its report on 7 August 2026. It recommended grant of the licence subject to specified safeguards and implementation conditions.
DHBVNL and UHBVNL challenged several aspects of the Committee’s analysis, including its treatment of capital adequacy, phased network development, consortium capability and the financial impact on the incumbent licensee.
The Commission subsequently supplied the report to the parties, considered their comments and heard the matter further. It also permitted timely intervenors to submit comments in accordance with the statutory process.
The Commission rejected the preliminary objection to the Expert Committee’s constitution, holding that the Committee’s role was recommendatory and that the Commission retained its adjudicatory authority. It also accepted additional documents filed by the applicant, observing that the proceedings were regulatory in nature and that the respondents had been afforded an opportunity to respond.
3. Central Objection: Eligibility Does Not Automatically Entitle an Applicant to a Licence
DHBVNL and UHBVNL emphasised that the issue was not whether competition in electricity distribution should be permitted in principle. Their objection was that the applicant had not demonstrated compliance with every requirement necessary for grant of the proposed licence.
Relying on the decision in Noida Power Company Limited v. Paschimanchal Vidyut Vitran Nigam Limited, the discoms argued that the Sixth Proviso to Section 14 of the Electricity Act, 2003, prevents refusal of a licence merely because another distribution licensee already operates in the same area. However, according to them, this provision does not make the grant automatic or eliminate the Commission’s discretion to examine other statutory requirements.
They further submitted that capital adequacy, creditworthiness and the ability to discharge the universal service obligation had to be established before the licence was granted. In their view, these were conditions precedent to grant, rather than matters that could be deferred until the implementation stage.
The discoms also argued that competition could not be assessed solely by reference to the applicant’s proposed commercial benefits. The Commission was required to consider the potential effect on existing consumers, the incumbent’s infrastructure, cross-subsidy arrangements and long-term power purchase commitments.
HERC rejected the principal objections to the grant and distinguished eligibility for a licence from the subsequent implementation of the licensed business. It treated several matters raised by the discoms, including stranded costs, tariff consequences and certain power procurement issues, as subjects for continuing regulatory supervision rather than grounds that independently prevented the licence from being granted.
4. Objection Concerning the Minimum Area of Supply
One of the principal legal objections concerned the minimum area of supply prescribed by Rule 3(2) of the Distribution of Electricity Licence Rules, 2005, as amended on 28 November 2022.
The discoms relied on the amended Explanation, which refers to the entire area covering either a Municipal Corporation or three adjoining revenue districts, or a smaller area as may be notified in accordance with the applicable provision.
According to DHBVNL and UHBVNL, the amendment deliberately removed the earlier reference to a Municipal Council. They contended that certain municipal bodies in Nuh district, including Ferozepur Jhirka, Nuh, Tauru and Punhana, were Municipal Committees rather than Municipal Corporations and therefore could not independently satisfy the Municipal Corporation limb of the rule.
They also argued that the proposed licence area covered only two revenue districts, whereas the alternative limb referred to three adjoining revenue districts. In their view, the applicant could not combine a qualifying Municipal Corporation area with additional territory without adequately demonstrating compliance with the minimum-area requirement.
The discoms challenged the Expert Committee’s interpretation that the prescribed area constituted a minimum threshold rather than a maximum limit. They contended that such an interpretation could permit applicants to satisfy the requirement through a qualifying core area and then append additional territory selectively.
They also questioned the reliance placed on earlier regulatory decisions interpreting the pre-amendment wording and submitted that the opinion obtained from former Chief Justice of India Dr. Justice D.Y. Chandrachud was a privately commissioned legal opinion, not a binding judicial determination.
HERC rejected the objection and accepted the applicant’s interpretation of the applicable minimum-area requirement. It treated the relevant provision as prescribing a threshold and examined the proposed geographical coverage in the context of the licensing rules and the material placed before it.
The Commission’s treatment of the issue is significant because it addresses whether the minimum-area requirement should be interpreted as a restriction on the maximum territory that may be included in a licence application or as a minimum eligibility threshold.
5. Capital Adequacy: Dispute Over Market Value and Book Value
Capital adequacy was among the most substantial objections raised by the incumbent discoms.
DHBVNL and UHBVNL pointed out that Eleven Power Private Limited was a recently incorporated company whose own financial statements showed paid-up capital of approximately ₹1 crore, net worth of approximately ₹80.35 lakh and a loss of approximately ₹19.65 lakh for FY 2025-26.
The applicant relied on the financial resources of its promoter, SAS Fininvest LLP. According to the material discussed by the parties, the promoter’s certified book-value net worth was approximately ₹94.95 crore, whereas the market-value figure relied upon by the applicant was approximately ₹4,085.60 crore, primarily associated with shares of Global Health Limited.
The discoms contended that capital adequacy should be determined using audited financial statements and recognised accounting measures rather than market valuations of listed shares. They relied on the definition of net worth under the Companies Act, the applicable standard bidding documents and earlier regulatory decisions.
They further argued that a market valuation linked substantially to one listed company’s shares could fluctuate considerably and might not represent resources immediately available to finance a distribution network.
5.1 Volatility and Realisability of Listed Shares
The discoms highlighted fluctuations in the market value of the promoter’s investment in Global Health Limited. They argued that the value of the shares had varied materially over the relevant financial years and that a substantial block sale could itself affect the market price.
They also raised questions concerning capital gains tax, the time required to monetise the shares and the possibility of existing encumbrances.
In their submission, the Commission could not treat the entire market value of the shares as equivalent to cash or committed equity available for the proposed distribution business.
5.2 Ownership and Beneficial Interest
Another objection concerned the ownership of the shares relied upon to establish the promoter’s financial strength.
The discoms referred to the company’s shareholding disclosures and the promoter LLP’s financial statements, arguing that the relationship between the registered holder and the claimed beneficial owner required adequate documentary substantiation.
They also raised questions concerning the availability of the shares for the proposed project and whether the promoter’s other obligations or changes in its partnership structure could affect the resources available to the applicant.
5.3 Creditworthiness and Debt Commitments
DHBVNL and UHBVNL questioned whether the solvency certificates relied upon by the applicant established sufficient financial capacity for a five-year capital expenditure programme.
They argued that a solvency certificate is not equivalent to a binding financing commitment and pointed out that the identified debt sanction was approximately ₹205 crore for Phase I, compared with the proposed total debt requirement of ₹3,301.71 crore.
According to the discoms, the gap between the proposed debt requirement and the committed financing demonstrated that the project’s funding arrangements were not sufficiently established.
5.4 Commission’s Findings on Capital Adequacy
HERC accepted the applicant’s reliance on the market value of the promoter LLP’s listed investments for the purpose of assessing capital adequacy.
The Commission reasoned that the Companies Act definition relied upon by the discoms did not govern an LLP in the same manner and that the applicable licensing framework expressly contemplated consideration of the promoter’s financial resources.
The Commission also considered the promoter’s commitments, the applicant’s capital infusion and the documents relating to the proposed funding arrangements. It adopted a progressive mobilisation approach rather than requiring the entire financing requirement for the five-year plan to be irrevocably committed at the licensing stage.
However, the grant was accompanied by safeguards relating to earmarked resources, advance equity infusion and debt arrangements. The conditions included maintaining earmarked resources of at least ₹1,500 crore, subject to adjustment for funds actually infused, and obtaining the prescribed equity and debt funding before the relevant capital expenditure milestones.
The decision therefore did not remove financial oversight. Instead, it accepted the applicant’s capital adequacy case while imposing continuing obligations intended to ensure that resources would be available as the project progressed.
6. Objection to the Applicant’s Lack of Distribution Experience
DHBVNL and UHBVNL questioned whether Eleven Power possessed sufficient independent experience to operate a distribution licence.
They pointed out that the company had initially been incorporated on 6 June 2025 as Veyora Infra Private Limited for real estate activities. Its name was changed to Eleven Power Private Limited on 24 February 2026, and its objects were amended to include electricity-related activities on 20 April 2026.
The discoms argued that the applicant was a newly created entity without an established record of distribution operations, an independent workforce or a demonstrated history of managing a distribution network.
They also relied on the provisions concerning prior experience and capability under the applicable Central Rules and State regulations. According to them, the applicant could not satisfy the requirements merely by referring to the experience of third-party entities that were not themselves the licence applicant.
HERC rejected the argument that prior distribution experience was an absolute statutory precondition to grant. The Commission considered the applicable rules and regulations, including provisions dealing with applicants incorporated less than three years before the application.
The Commission also considered the proposed consortium arrangements and the experience of the participating entities in areas such as metering, billing, operation and maintenance, infrastructure development and electricity-sector projects.
The distinction drawn by the Commission was between the applicant’s eligibility to obtain a licence and its obligation to establish the personnel, organisational arrangements and technical systems necessary to commence supply.
The licence conditions required the applicant to establish the necessary organisation, appoint key managerial personnel and complete the prescribed implementation requirements before commencing supply.
7. Dispute Over the Consortium and Memorandum of Understanding
The applicant relied on a Memorandum of Understanding with Vision India Services, HEC Infra Projects Limited and Advait Energy Transitions Limited to demonstrate access to relevant technical and operational capabilities.
DHBVNL and UHBVNL questioned the timing, enforceability and practical adequacy of the arrangement. They noted that the version initially filed with the application was unsigned and that the signed version was subsequently submitted.
The discoms also challenged the additional MoU addendum introducing a six-year lock-in period. They argued that a six-year arrangement was insufficient to establish dependable technical and managerial capability for a proposed licence extending over 25 years.
They further submitted that the consortium members’ experience was largely derived from contracts and project-specific work and did not necessarily establish experience as distribution licensees. In their view, the applicant had not demonstrated that the arrangements imposed sufficiently enforceable obligations regarding universal service, metering, billing, maintenance and operational continuity.
HERC held that the MoU was binding and enforceable and did not require a separate consortium agreement as a precondition to grant. On this point, the Commission departed from the Expert Committee’s recommendation for a separate legally enforceable consortium agreement.
Nevertheless, the applicant remained subject to the licence conditions governing organisational readiness, key managerial personnel and commencement of supply. The Commission’s decision did not mean that the applicant could commence distribution operations without complying with the applicable technical and operational requirements.
8. Infrastructure Readiness and Universal Service Obligation
The discoms strongly objected to the proposed phased development of the distribution network.
They relied on Section 42(1) of the Electricity Act, 2003, which requires a distribution licensee to develop and maintain an efficient, coordinated and economical distribution system. They also referred to Section 43, which governs the duty to supply electricity to applicants seeking connections.
According to DHBVNL and UHBVNL, a distribution licensee should demonstrate its ability to serve the licensed area rather than rely on a network that would be developed gradually over several years. They contended that the proposed rollout left substantial parts of the area dependent on future infrastructure development.
The discoms questioned the proposed network capacity, the number and location of substations, the absence of sufficiently detailed feeder-wise implementation plans and the arrangements for outage management, emergency response and system control.
They also raised concerns regarding land availability, rights of way, road-cutting permissions, underground infrastructure, railway and metro crossings, gas pipelines and airport-related restrictions.
The objections included a challenge to the proposed network architecture in the Gurugram Pilot Project Belt, where the applicable HERC framework prescribes a 220/33/0.4 kV architecture without an 11 kV tier.
8.1 Commission’s Approach to Phased Network Development
HERC relied on the Appellate Tribunal for Electricity’s judgment dated 11 March 2026 in MCGM (BEST) v. MERC, Appeal No. 279 of 2017, in considering whether network development could be phased.
The Commission held that the development of a distribution network is a continuing obligation and that the law does not necessarily require the entire network to be constructed before the licence is granted.
It also observed that a non-licensee cannot lawfully develop and operate a distribution network in the same manner as a licensed entity. Requiring a fully duplicated network before grant could therefore result in substantial upfront expenditure before the licensee has established its actual consumer base.
The Commission found that the applicant’s phased approach was not, by itself, inconsistent with the applicable framework. It also considered the applicant’s proposed coverage of Nuh from the initial phase and the allocation of capital expenditure to that area while examining the allegation of cherry-picking.
However, the Commission imposed implementation safeguards, including the filing of a Phase I implementation plan within 60 days of grant, submission of plans for subsequent phases before commencement of the relevant work, periodic progress reports, performance monitoring and compliance with applicable reliability requirements.
The Commission also required compliance with the prescribed architecture in the Pilot Project Belt and treated the applicant’s undertaking concerning that architecture as an enforceable licence condition.
9. Allegation of Cherry-Picking and Selective Consumer Migration
A central concern raised by DHBVNL and UHBVNL was that the applicant might focus on profitable industrial and commercial consumers while avoiding the cost of serving less remunerative areas.
The discoms pointed out that Gurugram and Nuh contributed substantially to DHBVNL’s sales and revenue. They argued that a new licensee could attract high-revenue consumers while leaving the incumbent with a reduced consumer base and a larger proportion of fixed costs.
They also challenged the applicant’s projected migration assumptions, which anticipated that approximately 2.5% of existing consumers would switch initially, increasing to 4% by FY 2030-31. According to the discoms, the projected sales profile and the expected contribution of new consumers did not adequately establish that the applicant would serve the entire licensed area on a non-discriminatory basis.
The discoms submitted that cherry-picking should be examined by reference to actual capital commitments and network development, rather than by the mere inclusion of an area in the proposed licence.
They also raised objections to permitting independent-feeder consumers to migrate before the applicant had constructed the network required to serve the whole area.
HERC rejected the allegation of cherry-picking. It considered the phased rollout, the proposed allocation of capital expenditure to Nuh and the projected sales profile. The Commission found that Nuh was included from the initial phase and that the proposed investment allocation did not establish an intention to avoid the area.
The Commission also rejected the proposed blanket restriction on migration by independent-feeder consumers and did not impose a general prohibition on new connections.
At the same time, it required the applicant to follow a non-discriminatory connection process, publish the applicable procedures and fees, maintain connection records and submit periodic performance reports.
10. Cross-Subsidy, Stranded Costs and Financial Impact on DHBVNL
The financial implications for the incumbent distribution licensee formed a major part of the objections.
DHBVNL and UHBVNL argued that consumer migration could reduce the sales and revenue available to recover the fixed costs of existing power purchase agreements and distribution assets.
They pointed out that long-term power purchase agreements carry capacity charges that may remain payable even when electricity is not drawn in the same quantity. According to the discoms, a reduction in sales in the licensed area could therefore increase the cost burden borne by the remaining consumers.
The discoms submitted estimates of potential revenue loss under different migration scenarios and raised concerns about the impact on domestic and agricultural consumers, who benefit from the existing tariff and cross-subsidy structure.
They also argued that the loss of cross-subsidy and additional surcharge revenue could not be addressed through the existing statutory mechanism because Sections 42(2) and 42(4) of the Electricity Act concern open access.
In their view, the Commission should have established a mechanism to recover stranded costs and the relevant financial consequences before granting the licence.
HERC did not accept these financial concerns as independent grounds for refusing the application. It treated the tariff impact, stranded costs, cross-subsidy implications and related financial claims as matters to be examined through the applicable tariff, Annual Revenue Requirement (ARR) and true-up proceedings.
The Commission acknowledged that the incumbent’s financial position and the consequences of consumer migration required regulatory attention. It directed compliance with applicable and future orders concerning the relevant tariff adjustments, cross-subsidy and additional surcharge provisions.
The decision therefore leaves an important practical issue for subsequent proceedings: how the financial consequences of parallel distribution are to be assessed and treated within the applicable regulatory framework.
11. Objections to the Power Procurement Model
The applicant proposed that approximately 80% of its electricity supply would come from renewable sources, with the balance sourced from thermal power.
DHBVNL and UHBVNL questioned the reliability and commercial feasibility of the proposed model. They argued that Green Day-Ahead Market purchases are market-based transactions rather than firm long-term capacity arrangements and that renewable procurement would require appropriate balancing and storage arrangements.
The discoms also questioned the absence of an identified thermal generating source, the level of detail concerning battery energy storage systems and the arrangements for interstate transmission access.
They submitted that a distribution licensee intending to serve industrial and commercial consumers requiring reliable supply should demonstrate how its procurement strategy would meet demand under varying market and system conditions.
HERC did not treat the absence of long-term power purchase agreements as an automatic bar to grant. It accepted the proposed procurement model subject to the applicable regulatory approvals and oversight.
The Commission also clarified that the proposed procurement arrangements remained subject to approval under Section 86(1)(b) of the Electricity Act, 2003, where applicable. The grant of the distribution licence did not dispense with the need to comply with power procurement requirements or obtain the necessary approvals before commencing supply.
The treatment of the proposed battery storage investment was also left subject to subsequent regulatory examination, including consideration of cost-benefit and prudence.
12. Consumer Migration Framework and Continuity of Supply
The discoms raised concerns about the absence of a comprehensive migration framework governing the movement of consumers from one distribution licensee to another.
They argued that consumer migration required clear rules for outstanding dues, security deposits, disputed bills, metering, final readings, disconnection, energisation and grievance redressal.
They also highlighted the need for arrangements to prevent interruption of supply during migration and to ensure that consumers did not remain simultaneously energised through both distribution networks.
Another concern was the absence of a clear supplier-of-last-resort mechanism if the new licensee experienced financial distress, failed to procure electricity or ceased operations.
HERC treated the migration framework as a condition to be fulfilled before consumer switch-over, rather than a prerequisite that had to be fully completed before the licence could be granted.
The Commission required the applicant to file a Migration Protocol petition within 60 days of grant. The proposed safeguards included the handling of outstanding dues, verification of final meter readings, coordination between licensees, disconnection only after successful energisation through the receiving network and arrangements for exchanging consumer data.
The Commission also rejected the proposed general embargo on migration by independent-feeder consumers. The practical operation of migration will nevertheless depend on compliance with the approved protocol and other applicable regulatory requirements.
13. Transmission Connectivity, Grid Security and External Infrastructure Charges
HVPNL’s role as the State Transmission Utility and State Load Despatch Centre made transmission access and system security important aspects of the proceedings.
The discoms argued that transmission studies, including load-flow analysis, short-circuit studies, protection coordination, reactive power assessment and system stability analysis, should be completed before the licence was granted.
They also raised concerns about compatibility with SCADA and energy-management systems, the coordination of protection arrangements between parallel networks and the possible implications for the existing transmission infrastructure.
A further objection concerned the cost of external electrical infrastructure. The discoms referred to the HERC amendment notified on 27 September 2023, which provides for External Electrical System Development Charges under the applicable framework.
They contended that the proposed licensee should not be permitted to use infrastructure whose development had been funded by existing consumers without due consideration of the applicable charges and regulatory requirements.
HERC held that an STU or other transmission-related no-objection certificate was not a precondition to grant of the distribution licence in the circumstances of the case. It noted that the relevant connectivity and transmission studies could be undertaken after grant and before commercial energisation, in accordance with the applicable framework.
The Commission required the licensee to obtain the necessary connectivity and General Network Access arrangements, execute interconnection and SLDC agreements, complete the prescribed system studies and comply with the Haryana Grid Code and applicable CEA regulations before commencing supply.
These conditions are important because the grant of a distribution licence does not itself confer an unconditional right to energise a network or draw power through the transmission system.
14. Objection Concerning the Gurugram Pilot Project Belt
The discoms separately challenged the proposed distribution architecture in Gurugram Sectors 58–115, which fall within the area governed by HERC’s notification dated 27 September 2023.
According to the objections, the notified architecture requires a 220/33/0.4 kV arrangement without an 11 kV distribution tier. The applicant’s proposal included conventional 33/11 kV distribution substations and transformers within the relevant area.
The discoms contended that this approach would duplicate infrastructure, conflict with the notified architecture and potentially affect investments already made under existing infrastructure projects.
HERC required the applicant to comply with the prescribed architecture. It treated the applicant’s undertaking as an enforceable licence condition and required verification of compliance before commencement of supply.
The Commission also clarified that existing consumers receiving supply at 11 kV would continue to receive supply at that voltage after migration, subject to the applicable arrangements.
15. Objections Relating to Additional Documents and Natural Justice
DHBVNL and UHBVNL challenged the manner in which certain additional documents were filed during the proceedings.
They argued that documents submitted after the matter had been substantially argued should not have been accepted without adequate procedural safeguards. They also questioned whether the Expert Committee had afforded the parties equivalent opportunities to clarify their respective positions.
The discoms raised concerns about the timing of the additional documents, the opportunity to respond to the applicant’s further submissions and the treatment of the legal opinion relied upon by the applicant.
HERC rejected the preliminary objection to taking the documents on record. The Commission observed that the matter involved regulatory examination and that the respondents had received the additional material and an opportunity to respond.
The Commission also emphasised the consultative character of the regulatory process. It considered the public comments and objections received within the prescribed period while declining to allow the proceedings to remain indefinitely open to repeated rounds of submissions.
The decision reflects the Commission’s approach to procedural fairness in regulatory proceedings, while leaving the underlying legal requirements of disclosure, opportunity to respond and reasoned adjudication applicable to future cases.
16. Public Interest and the Position of the Incumbent Licensee
The discoms’ final broad objection was that the Commission should exercise its discretion against grant even if the applicant satisfied the minimum eligibility requirements.
They argued that a parallel licensee would have to build its own distribution network while the incumbent would continue to bear costs associated with existing assets, power purchase commitments and statutory obligations.
They also pointed out that DHBVNL was responsible for universal service, standards of performance, agricultural supply, renewable purchase obligations and various government schemes. In their submission, the applicant should not be allowed to benefit from commercially attractive consumers without being subject to equivalent operational and financial responsibilities.
The discoms therefore sought a comprehensive assessment of the system impact, financial impact, tariff consequences, cross-subsidy implications and actual consumer benefits before grant.
HERC did not accept the incumbent’s objections as sufficient grounds to refuse the licence. The Commission considered the statutory framework permitting parallel distribution and concluded that the potential financial and operational consequences could be addressed through licence conditions and subsequent regulatory proceedings.
The Commission also treated the proposed licence as a case-specific decision rather than a general declaration that every future applicant would automatically be entitled to a parallel distribution licence.
17. Principal Safeguards Imposed by HERC
Although the Commission granted the licence, it imposed several conditions governing implementation, financing and consumer protection.
The principal safeguards include:
Financial resources: Maintenance of earmarked promoter resources of at least ₹1,500 crore, subject to adjustment for funds actually infused, along with annual certification.
Equity and debt mobilisation: Infusion of the prescribed equity at least three months before the relevant capital expenditure milestones, with matching debt arrangements and the required first-year working-capital equity.
Phased network implementation: Filing of the Phase I implementation plan within 60 days of grant and subsequent implementation plans in accordance with the prescribed timelines.
Universal service and non-discrimination: Compliance with applicable connection procedures, publication of fees, maintenance of connection records and periodic performance reporting.
Consumer migration: Filing of the Migration Protocol petition within 60 days and compliance with the approved framework before switching consumers.
Transmission and grid requirements: Completion of connectivity arrangements, system studies, interconnection agreements and applicable regulatory clearances before commercial energisation.
Power procurement: Compliance with the applicable approval requirements for procurement arrangements under Section 86(1)(b) of the Electricity Act, 2003.
Pilot Project Belt: Compliance with the prescribed 220/33/0.4 kV architecture and the related undertaking before supply begins.
Corporate and management changes: Prior HERC approval for specified changes in control, major shareholding, merger arrangements, consortium participation or constitutional documents.
Monitoring and reporting: Submission of progress reports, unbundled accounts and the required reliability and performance information.
These safeguards demonstrate that the grant of a licence and the commencement of electricity supply are separate regulatory stages. The licensee must satisfy the applicable conditions before it can begin the relevant operations.
18. What Happens After the Grant?
The Commission directed the applicant to convey its willingness to accept the licence and its conditions within one week. The subsequent licensing process includes publication of the prescribed notice in English and Hindi newspapers in the relevant area.
The applicant must also comply with the specified implementation timelines, file the Migration Protocol petition and satisfy the requirements concerning financial resources, organisational readiness, power procurement, connectivity and system security.
The order does not record that an appeal has been filed. Whether DHBVNL, UHBVNL, HVPNL or any other aggrieved party challenges the order before the Appellate Tribunal for Electricity (APTEL) is a separate question.
The issues most likely to remain significant in subsequent regulatory proceedings include the treatment of the promoter’s market-value net worth, the adequacy of phased capital mobilisation, the timing of network development, the financial impact of consumer migration, the recovery of stranded costs and the application of the prescribed technical architecture.
These are matters that must be assessed against the actual order, its operative conditions and any subsequent regulatory or appellate directions.
19. Why the HERC Order Matters for Electricity Distribution in Haryana
The order is significant because it addresses how the statutory framework for parallel distribution licensing is to be applied to a newly incorporated applicant proposing phased network development.
First, it distinguishes the minimum requirements for grant of a licence from the obligations that must be fulfilled before commencement of supply.
Second, it accepts that the financial strength of a promoter may be relevant to the capital adequacy assessment of an applicant, including where the promoter is an LLP and the relevant resources are supported by listed investments. At the same time, the decision imposes continuing financial safeguards.
Third, the order recognises that phased development may be considered in the context of the applicable statutory framework, subject to universal service obligations, non-discriminatory connection procedures and enforceable implementation conditions.
Fourth, it places consumer migration, transmission connectivity and power procurement within a continuing regulatory framework rather than treating the grant of the licence as an unrestricted authorisation to begin supply.
Finally, the order leaves important questions concerning the treatment of stranded costs, tariff implications and the incumbent’s financial position for subsequent regulatory examination. The practical effect of parallel licensing will therefore depend not only on the licence itself but also on the implementation of the conditions and the Commission’s future decisions.
Conclusion
The HERC order dated 19 October 2026 in Petition No. 30 of 2026 marks an important development in the application of the Electricity Act, 2003, to parallel distribution licensing in Haryana. By granting a distribution licence to Eleven Power Private Limited for the Gurugram and Nuh revenue districts, the Commission rejected the principal objections raised by DHBVNL and UHBVNL concerning capital adequacy, prior experience, phased network development, consumer migration and the financial consequences for the incumbent.
At the same time, the decision does not authorise immediate commencement of supply without further compliance. The licensee remains bound by the conditions concerning financial mobilisation, network implementation, universal service, consumer migration, power procurement, transmission connectivity and technical standards.
The practical implications will depend on whether the licensee fulfils these obligations within the prescribed timelines and how the Commission addresses the incumbent’s financial and tariff-related concerns in subsequent ARR and true-up proceedings. The order also makes clear that the grant is case-specific and does not create an automatic entitlement for future applicants seeking parallel distribution licences in Haryana.
Disclaimer: This article is prepared for general information and educational purposes only. It summarises the positions advanced by the parties and the Commission’s findings as recorded in the order. The objections of DHBVNL and UHBVNL should not be read as findings accepted by HERC unless expressly stated. This article does not constitute legal, regulatory or commercial advice. Readers should consult the complete order dated 19 October 2026, the applicable statutory provisions and subsequent regulatory or appellate decisions before relying on the information for any specific matter.
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