Parallel distribution licence: HERC grants one for Gurugram and Nuh
The Haryana Electricity Regulatory Commission (HERC) on 19 October 2026 granted Eleven Power Private Limited a 25-year parallel distribution licence for the Gurugram and Nuh revenue districts under the Electricity Act, 2003. The State-owned Dakshin Haryana Bijli Vitran Nigam continues to supply its consumers; they can switch only under a protocol HERC must approve.
Syllabus: Prelims · Current Affairs & IR; GS3 · Liberalisation & Industry; GS2 · Statutory & Regulatory Bodies
Why this matters for UPSC
GS3 energy infrastructure and GS2 regulatory bodies: Prelims can ask what the sixth proviso to Section 14, open access and the additional surcharge are, and the APTEL appeal route; Mains, whether competition in electricity distribution can coexist with cross subsidy.
Why it matters
A Gurugram shop owner who has waited months for a new connection, or a family facing frequent outages, may later have a second company to buy from, and the fear of losing customers can push both suppliers to connect faster and fix faults sooner. Nothing changes overnight: the State company keeps supplying everyone until the new wires reach an area and the switching rules are approved. The risk lies elsewhere. Tariffs are set so that farmers and small households pay less than their supply costs while commercial and industrial users pay more. If those users leave, the State company's finances, and in time the subsidised tariffs, come under strain unless the regulator prices each switch fairly.
Prelims pointers
- Electricity Act, 2003, Section 15: an applicant publishes notice of its application within seven days, and objections received within 30 days must be considered before a licence is granted.
- Section 15(8): a licence under the Electricity Act, 2003 stays in force for 25 years unless revoked.
- Section 42(2): open access carries a surcharge, fixed by the State Commission, that meets the current level of cross subsidy in the licensee's area of supply.
- Section 42(4): a consumer permitted to buy from someone other than the area's licensee pays an additional surcharge to meet that licensee's fixed cost of its obligation to supply.
- Section 43: a distribution licensee must supply premises within one month of a complete application; where new mains or substations are needed, within the period the Commission specifies.
- Section 86(1)(d): the State Commission issues licences to transmission and distribution licensees and electricity traders operating within the State; Section 82 has each State Government constitute one.
- Section 111: anyone aggrieved by a Commission's order may appeal to APTEL within 45 days of receiving it; appeals from APTEL go to the Supreme Court (Section 125).
- 2005 licence Rules, rule 3(2): the applicant, with its promoters, must show it can fund equity of 30% of the investment cost the Commission fixes.
Practise a UPSC-style question
With reference to distribution licences under the Electricity Act, 2003, consider the following statements:
1. A second distribution licensee in an area must supply its consumers through the existing licensee's network.
2. The additional requirements of capital adequacy, creditworthiness and code of conduct for such applicants are prescribed by the Central Government.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Show the answer
Answer: (b) 2 only
Answer: (b) 2 only. The Act lets a second licensee in, but through its own distribution system.
Statement 1: incorrect. The sixth proviso to Section 14 allows two or more licensees in the same area, each through its own distribution system.
Statement 2: correct. The same proviso leaves the extra tests to the Central Government, which set them in the Distribution of Electricity Licence Rules, 2005.
Eliminate: Statement 2 is correct, as the proviso names the Central Government. Out: (a), (d).
Eliminate: Statement 1 is incorrect, as the Act requires an own network. Out: (c).
Trap: Swapped attribution. Network sharing is what the draft Electricity (Amendment) Bill, 2025 proposes; the statement pins that proposal on the 2003 Act as it stands.
Remember: Section 14, sixth proviso: many licensees, one area, each with its own wires.
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