Torrent's triumph in Bhiwandi persuaded several other states to adopt the model. But to date Bhiwandi remains the only success story.
A main constraint for bidders has been the reliability of government data on consumers, billing and losses, said Rahul Bagdia, co-founder of utility consultancy pManifold.
The winners have mostly been companies with no experience in distribution. Bigger players with deeper pockets are more risk averse and have refrained from final bids or quoted low. Companies have also struggled to get working capital from banks.
"We faced tremendous amount of difficulty in convincing banks to lend to us due to the newness of the franchise model and (the central bank's) diktat to decrease exposure to the power distribution sector," said Kaustubh Dhavse, senior vice-president at Spanco, which started a franchise operation in the Maharashtra city of Nagpur more than a year ago.
With the franchise model, companies offer a price at which they would buy power from the state utility to supply city consumers at a tariff decided by the state regulator. The contract goes to the highest bidder, who makes a profit by curbing theft and other transmission losses.
Less than 200 miles from Agra is Kanpur, a major industrial city that is home to tanneries and hosiery and food processing factories. Distribution losses are sky-high and power cuts frequent.
This is the next big test for Torrent and the franchise model. With its reputation dented by the trouble in Agra, the company will have to move fast to improve power supplies to win people's confidence, businessmen and politicians said.
Heavy-handed tactics to clamp down on electricity theft will not work in Kanpur, warned Manmohan Rajpal, head of the India Industrial Association in the city.
"If they do that here, they will be beaten up," he said.