The centre has approved a financial restructuring plan to deal with the losses of state electricity distribution companies, which are around Rs 1.9 lakh crore, or more than 2% of the country’s gross domestic product. There is little doubt that the crisis is a result of the companies, state electricity regulatory commissions, state and central governments, and banks failing to ensure the existing legal provisions were implemented. This article, published in the December 22, 2012 issue of the Economic and Political Weekly, argues that while this bailout may be unavoidable, the plan does not address the issue of institutional accountability that is at the root of this crisis.