Controversy over electricity in Haryana: 25-year license granted to a private company

In Haryana, the Haryana Electricity Regulatory Commission (HERC) has granted a 25-year electricity distribution license to a private company for the Gurugram and Nuh districts. However, the state government has issued directives to halt this arrangement.

The state government and the electricity regulatory commission are at loggerheads over power distribution in Haryana. The HERC granted a 25-year license to a private firm, Eleven Power Private Limited, to distribute electricity in Gurugram and Nuh. Following this decision, electricity department employees staged a protest and went on strike. In response, the government led by Chief Minister Nayab Singh Saini directed the commission not to issue any new parallel electricity distribution licenses in the state.

The central question in this matter is: what impact will the entry of a private company have on state-owned power utilities and ordinary consumers? The government fears that this could adversely affect the revenue of state-owned power companies and the job security of their employees.

What is the full story behind electricity distribution in Haryana?

On October 19, the HERC granted a 25-year electricity distribution license to Eleven Power Private Limited. Under this arrangement, the company will be permitted to supply electricity in Gurugram and Nuh, alongside the existing state-run utility, Dakshin Haryana Bijli Vitran Nigam (DHBVNL). The company has proposed an investment of ₹4,717 crore over the next five years.

Once the necessary approvals are secured and the infrastructure is in place, the company is expected to begin power supply by 2027-28. Under this framework, once the private company’s network reaches these areas, consumers may gain the option to choose their electricity supplier.

Why is the government opposing this decision?

The primary concern of both the government and the electricity department employees relates to the potential impact on the revenue of the state-owned power distribution utility and the existing operational framework. Gurugram and Nuh are economically significant regions for the Dakshin Haryana Bijli Vitran Nigam. Nevertheless, the state-owned company will still have to bear the costs associated with power infrastructure and existing power purchase agreements.

Will electricity bills go up?

It is too early to say, as the granting of a license to a private company does not necessarily mean that consumers' electricity bills will rise immediately. However, a decline in the state-owned corporation's revenue could lead to increased pressure regarding future electricity tariffs and subsidies.