Haryana electricity row: How a private licence triggered a statewide crisis

A 25-year licence for Eleven Power has put Haryana's power regulator and government at odds, raising concerns over parallel distribution and the financial health of state-run discoms

Haryana Chief Minister Nayab Singh Saini’s move to block parallel electricity distribution licences last week has put the state government at odds with its electricity regulator.

 

The Haryana Electricity Regulatory Commission (HERC) decided on October 19 to grant Eleven Power Private Limited a 25-year licence to distribute electricity alongside Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL) in Gurugram and Nuh. The decision triggered a strike by electricity employees, following which the government invoked Section 108 of the Electricity Act, 2003, to direct the regulator not to operationalise parallel distribution licences anywhere in Haryana.

 

The dispute also comes amid a national push for competition in electricity distribution, backed by Union Power Minister and former Haryana Chief Minister Manohar Lal Khattar.

  

How did Eleven Power's licence trigger an electricity crisis in Haryana? 

HERC’s order allows Eleven Power to build a distribution network in an area already served by DHBVNL. More than 830,000 consumers could eventually choose between the two distributors as the private company expands its network. Eleven Power has proposed an investment of ₹4,717 crore over five years, with electricity supply expected to begin in 2027-28, subject to the necessary clearances and infrastructure development.

 

Under parallel distribution, two licensed companies can supply electricity in the same geographical area in which the existing state utility continues to operate, while consumers can choose a supplier once the new distributor’s network reaches their area.

 

The government and electricity employees have opposed the arrangement, citing concerns over jobs, consumer interests and the financial position of state-run utilities.

 

Why did HERC approve Eleven Power's electricity distribution licence? 

HERC is Haryana’s statutory electricity regulator that grants licences, regulates tariffs and oversees aspects of electricity supply and service quality. Its decisions are governed by the Electricity Act, 2003, and the state’s regulatory framework.

 

Eleven Power applied to HERC under Sections 14 and 15 of the Act. The commission granted the licence despite objections from state-owned distribution companies and employee representatives.

 

A key consideration was the backlog of applications for new electricity connections and increases in sanctioned load. As of October 1, 2025, DHBVNL had 108,590 pending applications involving 1,642.542 megawatts (MW) of load. Uttar Haryana Bijli Vitran Nigam Limited had another 20,603 applications involving 770.407 MW. The combined pending load was about 2,412 MW.

 

The state government, however, had objected to the proposal on grounds including capital adequacy, technical preparedness and the company's ability to meet its universal service obligations.

 

Why is Haryana concerned about private electricity distribution? 

The principal concern is the potential impact on DHBVNL’s finances. Gurugram and Nuh account for 35.23 per cent of DHBVNL’s electricity sales and 42.98 per cent of its revenue of ₹9,493.75 crore in 2025-26.

 

DHBVNL argued that if private competition draws away commercially attractive consumers, it could be left with a weaker revenue base while continuing to bear fixed infrastructure costs and existing power purchase commitments.

 

The concern also involves cross-subsidies because revenue from some commercial and industrial consumers helps support subsidised electricity supplied to households and farmers. If the public utility loses a disproportionate share of its higher-paying consumers, the burden on its remaining consumers or the state government could increase.

 

DHBVNL estimated that a shift of 2.5 per cent of existing electricity sales to Eleven Power could result in a revenue loss of ₹424.12 crore in 2027-28. The projected loss could rise to ₹1,898.75 crore if the shift reached 20 per cent.

 

Eleven Power disputed the concerns, arguing that its plans covered both urban and rural areas and that much of its projected growth would come from new connections rather than consumers switching from DHBVNL. The regulator’s order treated potential financial consequences as matters for subsequent regulatory assessment rather than sufficient grounds to reject the licence.

 

Former Haryana Chief Minister Khattar has backed a broader national framework for parallel distribution licensing, which the Union Power Ministry’s consultative committee discussed in July 2026. The stated objectives included expanding consumer choice, improving service quality and making more efficient use of distribution infrastructure.

 

However, Saini’s government has taken a different position on the Haryana licence, arguing that parallel distribution could harm consumers and the state’s existing utilities. The government had opposed Eleven Power’s application during the regulatory process and has now invoked Section 108 to direct HERC against parallel licences.

 

The government’s direction has helped end the strike for now, but the licence’s legal status remains a separate question, and the next steps by HERC and any proceedings before the appellate tribunal will determine how the matter progresses.