Overview

• The top court directed states and Union Territories to amortize existing regulatory assets exceeding ₹1.5 lakh crore within four years from April 1, 2024, and to clear any new deferred dues within three years.
• Regulatory assets represent the shortfall between the actual cost of electricity supply and the lower tariffs approved by state commissions to keep bills affordable.
• State Electricity Regulatory Commissions must prepare detailed, time-bound liquidation plans under Rule 23 of the Electricity Rules and submit them to the court.
• The Appellate Tribunal for Electricity will register suo motu cases, monitor compliance and has authority to issue directives and impose sanctions for missed deadlines.
• The court cautioned that any tariff increases to recover these dues must be phased, reasonable and kept within the 3% annual revenue-requirement limit to safeguard consumers.