Delhi: DERC’s draft tariff norms make room for major revamp in power sector

If a discom has a proposal for substantial network upgrade like making all overhead cables underground, then it would be considered by the DERC for funding and later, shall also form the basis of tariff determination

As Delhi is catching up with the concept of Smart Grid system, which would make the city’s electricity infrastructure go online, the Delhi Electricity Regulatory Commission (DERC) for the first time has introduced a special provision for financing and planning big ticket projects in its tariff determination norms.

The power regulator has sought suggestions from public and a final notification is likely in February 2017, based on which power tariffs would be revised next year.(AFP)

In its ‘Terms and Conditions for determination of Tariff Regulations, 2016’, released on Tuesday, the power regulator has allowed distribution companies to come up with detailed project reports on ‘Renovation and Modernisation for Life Extension’.

“This means that if a discom has a proposal for substantial network upgrade like making all overhead cables underground, then it would be considered by the DERC for funding and later, shall also form the basis of tariff determination,” an official from power discom, Tata Power Delhi Distribution Limited (TPDDL), said.

Till now, Delhi has no regulation for major projects and only routine upgradation works are accounted for. “Projects like redevelopment of Chandni Chowk where all overhead cables are to be made underground needed certain guidelines to be followed which aren’t there. Now there will be a framework that would include scope, justification, cost-benefit analysis, estimated life extension from a reference date, financial package, among others of the project,” explained a DERC official.

The power regulator has sought suggestions from public on this and a final notification is likely in February 2017, based on which power tariffs would be revised next year. Delhiites have been saved from tariff hikes for two consecutive years.

Installing a Smart Grid network would now fall under this category which may help expedite projects. “The scope of work for the Smart Grid network includes shifting the entire fault-prone overhead network into an underground line which is estimated at Rs40 crore. Then a low-voltage network has to be put in place which will cost about Rs80 crore and the balance of the Rs173 crore will be used for installing smart metres in the households of the pilot project area - Zone 503 in Shalimar Bagh,” a TPDDL official added.

The move assumes significance as Delhi’s power infrastructure is suffering for want of a complete upgrade. Most cables are decades old, some have not been changed since they were laid down in the late 1990s.