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<h1>Supreme Court orders clearance of Rs 27,200 crore regulatory assets in 4 years with strict audit and recovery rules</h1> The Supreme Court mandated that regulatory assets totaling Rs 27,200.37 crore owed to three private electricity distribution companies in Delhi be cleared within four years from April 1, 2024, with a maximum liquidation period of three years for future regulatory assets. The court defined regulatory assets as deferred revenue gaps recoverable through future tariffs and emphasized that tariffs must be cost-reflective, allowing revenue shortfalls only in exceptional cases. It directed regulatory commissions to limit regulatory assets to three percent of the annual revenue requirement, provide clear recovery plans including carrying costs, and conduct audits on delayed recoveries. The court highlighted the public nature of electricity supply and warned against unchecked growth of regulatory assets as regulatory failure that burdens consumers. It also assigned the Appellate Tribunal for Electricity the role of monitoring compliance with these directives.