Delhi CM Arvind Kejriwal had called for an audit of the three discoms alleging the trio has in the past manipulated accounts with an intention to hike power tariff.
While the discoms have been opposing the move, CAG agreed to carry out an audit after receiving a formal request from Lieutenant Governor Najeeb Jung.
Earlier senior officials of the three discoms had requested the Delhi government bureaucrats to desist from taking any action against them, calling on them to wait for the judgment of the Delhi High Court, in a matter which will determine if the CAG has the requisite authority to audit accounts of private discoms.
However, Kejriwal chose to move against them stating that the HC had not granted any stay on a CAG audit. The Delhi government, at present, has a 49% stake in these discoms, which is represented by the chief secretary, along with the finance and power secretaries in the boards of Tata Power Delhi Distribution Limited, BSES Rajdhani Power and BSES Yamuna Power.
The discoms have a multi-layered system of accounting in which they are audited both internally and externally by statutory auditors, who are empanelled with CAG as well. Further, the accounts of the discoms are also approved by the Board of directors of the companies.
After this, the approved accounts are then submitted to the Delhi Electricity Regulatory Commission (DERC), which undertakes a detailed prudence check.
The companies have consistently maintained that they buy their entire power from generating stations that belong to state and central governments at the rates determined by the Central Electricity Regulatory Commission and the DERC.
Disputing the government's claim that the discoms are earning revenue from Aggregate Technical and Commercial (AT&C) loss reduction, the companies argued that the CAG, under section 20 of its parent Act, has power to audit certain bodies and authorities and that they do not fall with the national auditor's ambit.