Delhi Electricity Regulator Issues New Payment Rules For Government-Backed Power Projects

The Delhi Electricity Regulatory Commission has announced the Seventh Amendment to the Supply Code and Performance Standards Regulations, 2017. These changes were made based on directions from the Government of NCT of Delhi under Section 108 of the Electricity Act, 2003. The amendment, which is now in effect from the date of its publication in the official Gazette, introduces new provisions under Regulation 24 to address electricity-related infrastructure works carried out by distribution companies on behalf of the Delhi government.

The amendment outlines a clear process for works such as shifting HT/LT lines and electrification of bus depots. These works are now to be divided into three broad stages: design and procurement, execution and installation, and testing, commissioning, and handover. This structured approach aims to bring more clarity and accountability in implementing such government-backed projects.

Distribution companies must now prepare a detailed scheme for each work, based on the latest Cost Data Book approved by the Commission. Payments to the distribution companies will be made in two parts. First, 30% of the estimated cost will be paid in advance against a proforma invoice and an undertaking. The remaining 70% will be paid after completion of each stage, upon submission of proper documentation, including an invoice, utilization certificate, and a completion report.

The regulation also ensures that the working capital needs of the discoms are met. Interest on the pending 70% amount will be included in the estimated cost, calculated at the marginal cost of funds based on the one-year lending rate of the State Bank of India, plus an additional 350 basis points. If the payment of the remaining 70% is delayed by more than 45 days, the same interest rate will be applied and paid by the concerned government department to the discom.

Importantly, discoms will not be required to furnish bank guarantees for the advance payment, recognizing their status as regulated electricity utilities. However, they must provide an undertaking that if the project is not completed, the advance amount will be adjusted against Delhi Transco Ltd.’s ARR, and this will be transferred back to the respective government department.

Lastly, the regulation specifies that the costs for such infrastructure projects will not be passed on to Delhi’s electricity consumers and will not be considered in the discoms’ revenue requirement calculations.