The Haryana Electricity Regulatory Commission (HERC) has decided not to proceed further with the grant of a parallel electricity distribution licence to Eleven Power Private Limited for Gurugram and Nuh districts, in an order dated October 28, The Hindu BusinessLine reported.

The commission said it would not proceed with the matter for as long as the state government's directions remained in force. The government issued its directive on October 26 under Section 108(1) of the Electricity Act, 2003, citing consumer interest, the financial implications for the state and public interest, and prohibiting parallel distribution licences across Haryana.

The hold reverses the immediate course set on October 19, when HERC approved a 25-year parallel distribution licence for Eleven Power — the first such licence in Haryana — covering more than 8.3 lakh consumers in Gurugram and Nuh. The company had accepted the licence and said it was taking steps towards implementation, and had proposed an investment of Rs 4,717 crore over five years to build its network.

In its directive, the government raised concerns that a parallel licence could lead to the selective acquisition of high-revenue consumers, affect cross-subsidies, leave existing power purchase commitments and distribution assets stranded, and impose an additional financial burden on the incumbent distribution licensee and consumers. It also referred to concerns over the proposed licensee's compliance with statutory requirements and its ability to meet universal service obligations.

The government clarified that its intervention was not an examination of the correctness of HERC's findings in granting the licence. Eleven Power's request for advance notice and an opportunity of hearing was rejected by the commission, which said no fresh adjudicatory exercise remained to be undertaken while the government's directions were operative.

The licence grant had earlier triggered protests by electricity department employees, who described parallel distribution as a step towards privatisation; a strike by power employees was called off after the government moved to block the licence, Mirror Now reported. Further investigation and proceedings will depend on how long the government's directions remain in force.