AAP's insistence on holding audit biggest worry for power discoms

If the exit poll predictions of AAP getting majority seats in Delhi state election come true, it would be unfavourable for the listed power distribution companies (discoms) such as Tata Power and Reliance Infrastructure. Analysts said the biggest worry for the investors is the AAP insistence of holding an audit of power discoms.

This means they will conduct effi cacy of the regulatory assets generated over the last few years. The regulatory assets are cumulative difference between cost of supply and retail tariff (or under-recoveries) and interest accrued on that amount in the last few years. In the last 12 years, such assets of discoms reached Rs 27,000 crore in 2013-14.


Nearly 35-40% of the total regulatory assets are due to the cumulative interest. Against these regulatory assets, the government allows discoms to hike tariff to recover this cost, which is refl ected as access defi cit charges. AAP wants to start an audit to fi nd validity of these assets. Investors are wary of an audit as it will be time-consuming and there would no scope for the tariff hike till the process ends.