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					</table>The Haryana government’s opposition to the state electricity regulator’s recent decision to grant a parallel distribution license to a private entity has stoked the debate over private participation in power distribution once again.
Earlier this week, the Haryana Electricity Regulatory Commission (<a href="https://herc.org.in/" target="_blank" rel="noopener">HERC</a>) <a href="https://www.mercomindia.com/haryana-regulator-grants-parallel-power-distribution-license-for-gurugram-nuh" target="_blank" rel="noopener">granted</a> a 25-year license to Eleven Power to operate alongside the incumbent Dakshin Haryana Bijli Vitran Nigam (DHBVNL) in Gurugram and Nuh districts.
The decision would potentially offer over 800,000 consumers an alternative power supplier in the two districts.
The Commission’s decision might face a legal challenge before the Appellate Tribunal for Electricity and, perhaps, even the courts if the state regulator’s decision is upheld. Shortly after the Commission announced its decision, Haryana’s Energy Minister Anil Vij stated that the government would appeal the grant of the parallel distribution license.
The Haryana Electricity Employees and Engineers Joint Front has, meanwhile, called for a three-day strike across the state.
Eleven Power’s petition was contested during HERC’s hearings, with DHBVNL arguing that a parallel license could significantly hit the sustainability of the incumbent utility, besides affecting the existing consumer mix, tariff framework, power procurement planning, infrastructure utilization, and cross-subsidy structure.
State governments opposing private players entering the distribution landscape is nothing new. Earlier this year, Tata Power was forced to <a href="https://www.mercomindia.com/discom-license-bids-in-karnataka-and-goa-rekindle-privatization-debate" target="_blank" rel="noopener">withdraw</a> its petition before the regulator for a parallel distribution license across five jurisdictions in Karnataka, covering 15 districts, after strong protests from power sector trade associations, political parties, and government-owned DISCOMs. Tata Power had come up with a similar plea in Goa only to be stonewalled by the state government.
State governments and DISCOMs owned by them have consistently argued that private players would “cherry pick” high revenue consumer areas without adequately demonstrating how they would serve rural, agricultural, low density, and other consumer segments traditionally catered to by government-owned distribution companies.
Similar concerns have echoed in Haryana with those against private participation in power distribution terming it as ‘backdoor privatization.’
The law, however, is unambiguous, according to proponents of the parallel distribution licensing regime. Section 14 of the Electricity Act permits more than one distribution licensee to operate in the same area, subject to certain conditions.
However, the argument in favor of the incumbent DISCOMs is that they could lose high tariff paying commercial and industrial consumers, leading to significant loss of revenue which otherwise could help cross-subsidize rural and agricultural consumers.
In the HERC case, for instance, Gurugram yields nearly half of DHBVNL’s revenues. With a second licensee in the equation, the utility’s revenues could take a hit.
The Ministry of Power, on its part, has been pushing for private licensees’ participation in power distribution by proposing reforms under the Electricity (Amendment) Bill, 2025. It has asserted that the policy tweaks will strengthen the power distribution sector through financial discipline, healthy competition, and enhanced efficiency, while ensuring better service and real choice for consumers.
While a second distribution licensee provides consumers with a choice, the duplication of power delivery infrastructure could lead to an increase in the cost of electricity. The government has sought to address this through an amendment in the Electricity (Amendment) Bill, 2025 to allow distribution licensees to operate in the same area by sharing the existing network of another DISCOM. This would enable optimal utilization of the already available infrastructure.
Currently, both Delhi and Mumbai have private distribution licensees operating in the jurisdictions the DISCOMs operate. However, in Delhi their areas of operation do not overlap with those of the government-owned utilities.

Haryana Government’s Pushback Puts Parallel Power Distribution in Spotlight

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					</table>The Haryana Electricity Regulatory Commission (<a href="https://herc.org.in/" target="_blank" rel="noopener">HERC</a>) has granted a parallel distribution license to operate in the Gurugram and Nuh districts of Haryana, providing consumers with an alternative electricity supplier.
The distribution license will be valid for 25 years.
The Commission said its decision to allow a parallel distribution license considered the substantial pendency of consumer grievances and applications for new electricity connections and load enhancements.
Background
Eleven Power, a subsidiary of SAS Fininvest, approached the Commission seeking a distribution license to establish a renewable energy-focused, technology-driven utility serving electricity consumers in the Gurugram and Nuh districts.
Eleven Power proposed procuring approximately 80% of its electricity from renewable sources, including firm and dispatchable renewable energy and battery storage-backed arrangements, with the remaining 20% from thermal sources.
The company argued that the Electricity Act permits multiple distribution licensees to operate in the same area of supply, provided applicants meet the prescribed eligibility criteria relating to minimum area of supply, capital adequacy, creditworthiness, and code of conduct.
Eleven Power proposed a total capital investment of ₹47.17 billion (~$497.71 million) for its licensed area. The company stated that its promoter, SAS Fininvest, had a net worth exceeding 30% of the proposed capital investment, equivalent to approximately ₹14.15 billion (~$149.30 million).
The company also highlighted its consortium partners&#8217; power-sector experience to demonstrate its technical and managerial capabilities. The consortium comprises Advait Energy Transitions, Vision India Services and HEC Infra Projects.
DHBVNL&#8217;s Objections
Dakshin Haryana Bijli Vitran Nigam (DHBVNL) opposed granting the parallel distribution license, arguing that it could significantly affect the existing consumer mix, tariff framework, power procurement planning, infrastructure utilization, cross-subsidy structure, and the financial sustainability of the incumbent distribution utilities.
It also argued that another licensee&#8217;s entry could affect the existing DISCOMs&#8217; ability to continue meeting their statutory obligations to all consumer categories.
DHBVNL contested Eleven Power&#8217;s interpretation that a municipal committee or municipal council satisfies the minimum area-of-supply requirement in Nuh.
It also questioned the company&#8217;s lack of operational experience in the electricity distribution sector. It sought disclosures regarding its existing borrowings, debt obligations, group liabilities, ongoing infrastructure commitments, committed capital expenditure, contingent liabilities, guarantees, and financial undertakings to assess its financial capacity.
DHBVNL argued that Eleven Power had failed to adequately establish its ability to meet universal service obligations and demonstrate the infrastructure readiness required to operate a power distribution business.
It alleged that Eleven Power&#8217;s proposed network would effectively &#8220;cherry-pick&#8221; high-revenue consumer areas without adequately demonstrating how it would serve rural, agricultural, low-density, and other consumer categories.
DHBVNL also argued that parallel distribution infrastructure could affect its existing power procurement commitments and resource adequacy, potentially resulting in stranded costs and impacting consumer tariffs.
Commission&#8217;s Analysis
HERC rejected the contention that Eleven Power&#8217;s proposed phased development of its distribution network was inconsistent with the universal service obligation.
The Commission noted that the rollout was not restricted to commercially remunerative areas and included Nuh from the first phase. Eleven Power proposed earmarking ₹3.04 billion (~$32.07 million) for Nuh, representing approximately 6.5% of its total proposed capital expenditure.
After analyzing the petitioner’s and respondent’s arguments, HERC concluded that Eleven Power had demonstrated the requisite capital adequacy and creditworthiness, proposed the minimum area of supply under the applicable statutory framework, and satisfied the code-of-conduct requirements.
The Commission, however, stipulated that Eleven Power&#8217;s distribution license would be subject to strict compliance with the notified pilot project belt architecture. All new connections released within notified  sectors must conform to the prescribed 220/33/0.4 kV configuration.
For existing consumers migrating to Eleven Power, the Commission clarified that consumers currently receiving supply at 11 kV would not be required to change their existing supply voltage solely because of the migration.
Based on its findings, HERC granted Eleven Power a parallel distribution license for 25 years covering the Gurugram and Nuh revenue districts.
The Commission also highlighted the large number of pending applications for new connections and load additions with Haryana&#8217;s incumbent DISCOMs, necessitating a parallel distribution architecture.
As of September 30, 2025, Uttar Haryana Bijli Vitran Nigam (UHBVNL) had 20,603 applications involving 770.407 MW pending. DHBVNL had 108,590 applications involving 1,642.542 MW pending as of October 1, 2025.
The aggregate pending load across the two DISCOMs stood at 2,412.949 MW, compared with 2,403.862 MW as of April 1, 2025.
HERC observed that the timely release of electricity connections is an essential component of a distribution licensee&#8217;s statutory obligations and directly affects consumer satisfaction while also facilitating higher revenue from electricity sales.
The Commission stated that the statutory framework for parallel distribution is intended to provide consumers with a choice and promote competition in the distribution sector.
However, HERC clarified that granting a parallel distribution license for Gurugram and Nuh must not be treated as a precedent. Any future applications for parallel distribution licenses will be considered independently on merits.
HERC directed Eleven Power to file a petition seeking approval of its consumer migration protocol within 60 days of the license grant.
Last year, the Ministry of Power <a href="https://www.mercomindia.com/government-asserts-proposed-reforms-will-cut-cost-of-electricity-supply?utm_source=chatgpt.com" target="_blank" rel="noopener">asserted</a> that government-owned DISCOMs will continue to operate alongside private licensees in a regulated, level-playing environment, citing the Electricity (Amendment) Bill, 2025.
Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Haryana Regulator Grants Parallel Power Distribution License for Gurugram, Nuh

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