Chandigarh, July 15 -- Eleven Power Private Limited's bid for a parallel electricity distribution licence in Gurugram and Nuh districts has run into stiff opposition from state owned power distribution company, Dakshin Haryana Bijli Vitran Nigam (DHBVN), with the latter contending that the 2025 incorporated company has grossly underestimated the investment required for establishing an independent distribution network which is capable of fulfilling its statutory universal service obligation (USO). Eleven Power has petitioned the Haryana Electricity Regulatory Commission (HERC) seeking grant of a parallel power distribution licence under Sections 14 and 15 of the Electricity Act, 2003. DHBVN at present exclusively serves electricity consumers in the two districts. The concept of USO is enshrined under Section 43 of the Electricity Act which puts a statutory obligation on every energy supplier to serve all consumers in its area without discrimination. A central point of DHBVN's objections to the Eleven Power's bid is the USO. While Eleven Power's business plan envisaged a capital investment of Rs.4,717 crore requiring promoter equity of about Rs.1,415 crore, the DHBVN in its objections before the Commission said that the capital investment required for establishing distribution infrastructure in Gurugram and Nuh revenue districts would be approximately Rs.11,397.75 crore at current price levels over and above the working capital requirement, requiring equity investment of Rs.3,419.33 crore for putting entire network for meeting universal supply obligation. This, it said, was as per the current infrastructure required to provide power supply to consumers in the proposed area of licensee jurisdiction. As per DHBVN's assessment, the investment requirement comprises Rs.6,754.21 crore for the high-tension network, Rs.3,443.99 crore for the low-tension network and Rs.586.22 crore for the 33 KV network. The utility said the estimates were prepared on the basis of the infrastructure required to provide electricity to nearly 8.68 lakh consumers spread across the Gurugram and Nuh revenue districts. DHBVN contended that the investment assessment should also account for working capital and land acquisition or lease costs during the implementation phase. The utility said that Eleven Power has failed to demonstrate availability of such equity through audited financials or internal resource generation. Its reliance on volatile market value of securities cannot justify creditworthiness for such a large-scale capital programme, it said. DHBVN said Eleven Power has failed to establish its capability to discharge the statutory obligations cast upon a distribution licensee under Section 43 of the Electricity Act. "The obligation is area-wide in nature and extends to all categories of consumers and all parts of the licensed area. However, from the infrastructure provided by Eleven Power, it is visible that the petitioner has envisioned the infrastructure cost as per share of their load and sales growth and not as per USO towards the whole area. This is further evidenced by the respondent's own assessment of its network infrastructure in the proposed supply area," it said. The utility has also cited HERC's 2014 decision rejecting India Power Corporation's petition for a second distribution licence in Gurugram. "The Commission has consistently held that an applicant must demonstrate a realistic assessment of the infrastructure requirement, a credible capital investment plan and adequate financial resources to implement the proposed distribution system. Applications founded upon tentative estimates, speculative valuations or uncertain funding arrangements have not been considered sufficient to satisfy the statutory requirements for grant of a distribution licence," it said. In its objections before the Commission, the Haryana Vidyut Prasaran Nigam (HVPN), the transmission utility, said Eleven Power business plan raises serious concerns regarding "cherry-picking" as the company proposes to initially supply consumers in the vicinity of grid substations at 220 kV to 66 kV levels which are, by definition, the highest-density industrial and commercial load centres and are also the most commercially lucrative consumers. The HVPN said it was aware of the broader implications of cherry-picking for the financial health of the incumbent distribution licensees, which in turn has implications on the cross-subsidy framework and the ability of the state to maintain affordable power supply to agricultural and rural consumers. "Elevent Power's business plan acknowledges that it expects only 2.5% of DHBVNs consumers to migrate to it, with the balance being new projects, industrial expansion, residential developments and commercial establishments. This is a clear indication that the Eleven Power's model is designed to attract premium commercial and industrial consumers while avoiding the less commercially attractive agricultural and rural consumer segments,'' the HVPN said. It also said the Eleven Power's business plan is conspicuously silent on concrete arrangements for last mile connectivity to agricultural consumers in Nuh district beyond a bare recitation of the statutory universal service obligation. Eleven Power in its petition has said that it would endeavour to follow all applicable regulations, practice, directions issued by the Commission to meet USO and serve all consumers, ensuring non-discriminatory supply of power to all categories of consumers....