Gurgaon power problem meets Rs 4,700-crore private ‘solution’. But there are hiccups

Eleven Power Private Limited has applied for a 25-year licence to distribute electricity alongside the existing government distributor, Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL). The company has proposed a phased investment of Rs 4,716.73 crore to build its own distribution network. If the licence is granted, consumers would be able to choose whether to remain with the existing distributor or switch to Eleven Power.

Residents said the need for an alternative is clear.

Sunil Sareen, president of Emaar Imperial Gardens RWA in Sector 102, said, “We spend over Rs 1 lakh a month on maintaining the power substation outside our society with our own funds.”

“The long power cuts also mean we spend lakhs every month on diesel generators. When pollution curbs kick in, we are told not to use them and to invest in cleaner alternatives. We need private players like in Delhi so we have another option and can bring down our tariffs. At present, the lack of individual connections and unified billing means residents end up paying much higher tariffs,” he added.

But for Haryana’s public power utilities, allowing a private player into the market could have wider financial implications.

State utilities argued that Gurgaon and Nuh generate over 42% of their revenue, and the loss of lucrative commercial consumers to a private entrant risks crippling the cross-subsidy structure that funds electricity for farmers and rural households.

The dispute is now before HERC, following a petition by Eleven Power, an entity promoted by SAS Fininvest LLP and chaired by Medanta co-founder Sunil Sachdeva.

An Expert Committee report had concluded a licence could be considered for the private firm, subject to safeguards. The Commission set a September 15 deadline for comments.

Can Eleven Power fund the project?

In written submissions to the HERC, which The Indian Express has seen, state utilities stressed that Eleven Power was incorporated in June 2025 with an initial paid-up capital of only Rs 1 crore and lacks an operational track record.

DHBVNL also challenged Eleven Power’s claim that the net worth of its promoter is Rs 4,085.60 crore. It argued that this figure rests largely on the market valuation of listed equity shares in Global Health Limited, held by an individual partner, while their book value is Rs 94.95 crore.

Discoms argued that this equity volatility offers no durable guarantee for a 25-year public utility.

Eleven Power rejected the argument, stating the electricity rules test the capacity to mobilise 30% equity over the preceding three years and not past distribution operations.

The company has since increased its authorised capital to Rs 1,500 crore and infused Rs 91 crore for Phase 1. It also has an in-principle Rs 205-crore debt sanction from IndusInd Bank and has legally earmarked Rs 1,500 crore in unencumbered promoter resources.

“Eleven Power is proposing Rs 4,716.73 crore of private investment, green power, and something Gurgaon’s consumers have never had: a choice of supplier. Nothing is taken from anyone,” a company spokesperson told The Indian Express.

How much will the new network cost?

Another major point of contention is the size and phasing of Eleven Power’s proposed network.

State utilities have estimated that establishing a comprehensive network across Gurgaon and Nuh would require Rs 11,397.75 crore — more than twice Eleven Power’s proposed investment.

Unions and discoms also alleged that the company could be cherry-picking areas with more lucrative consumers.

Eleven Power disputed this assessment. It said the discom’s Rs 11,398-crore estimate is based on rebuilding the existing overhead network, whereas its model would deploy a higher-voltage, underground network serving the same load with fewer assets.

The company said Gurgaon City actually has the largest allocation in its plan, at Rs 1,601 crore. To demonstrate non-discriminatory service, Eleven Power committed Rs 304 crore to Nuh immediately.

“The Rules set a floor, not a ceiling; we chose to add the whole of Nuh because it needs investment most,” the spokesperson told The Indian Express.

Where will the electricity come from?

Operational risks form another core challenge.

Discoms cautioned that Eleven Power proposes sourcing 80% of its supply from renewable energy without executing long-term Power Purchase Agreements (PPAs) or securing General Network Access.

Utilities argued that relying on short-term exchanges for critical peak demand bypasses HERC’s statutory tariff oversight under Section 86(1)(b) of the Act. They also warned that excavating parallel cables presents severe civic bottlenecks.

Eleven Power said regulations prohibit an unlicensed entity from signing long-term PPAs prior to formal grant. Initial short- and medium-term contracts will follow Ministry of Power guidelines and require HERC approval, transitioning progressively to long-term contracts as the consumer base stabilises.

The company said its supply would combine thermal base-load and dispatchable renewable power with battery storage to provide round-the-clock electricity.

Addressing civic disruption, the company stated its network will use compact, factory-built substations and underground cables requiring a fraction of conventional land.

Why the existing discom is worried

The biggest financial question is what happens to DHBVNL if some of its existing consumers switch to the new distributor.

DHBVNL said Gurgaon and Nuh contributed Rs 9,493.75 crore in FY 2025-26, and losing premium consumers could cause annual revenue losses reaching Rs 4,272 crore.

Eleven Power disputed these estimates as unrealistic constructs, assuming an immediate exodus. The company also said agricultural tariffs would remain insulated because the state government pays advance budgetary subsidies.

Why employees and farmers are opposing it

The proposal also faces labour resistance, with power utility employees and farmer unions staged massive protests warning of indefinite agitation.

Subhash Lamba, National Vice-President of the Electricity Employees Federation of India, argued that deficiencies identified by the Expert Committee indicate that the petition is legally unviable, and that the HERC needs to consider alleged botched privatisation attempts in the rest of the country.

Eleven Power countered that parallel licensing is fundamentally distinct from privatisation.

“Privatisation, wherever it has happened in India, meant a takeover: a public network, its assets and its workforce handed over to a private operator,” the company spokesperson explained. “Here, the existing utility keeps its network, its staff and every consumer who wishes to stay. A second network is built alongside it, with private investment, at no cost to the State, and consumers decide.”

“Gurgaon may be India’s most visible growth story, but every housing society, office tower, hospital, mall and factory in the city runs its own diesel generator, because the grid cannot be relied upon,” the spokesperson added.