DERC Issues Seventh Amendment 2025 To Supply Code For Government-Related Power Works In Delhi

The Delhi Electricity Regulatory Commission has issued a notification on August 7, 2025, introducing the seventh amendment to the Delhi Electricity Regulatory Commission (Supply Code and Performance Standards) Regulations, 2017. The amendment, notified under F. No. 17(220)/DERC/Engg./2023-24/7898/750, follows the directions received from the Government of the National Capital Territory of Delhi under Section 108 of the Electricity Act, 2003. The new provisions came into effect from June 2, 2025, and aim to streamline the execution of infrastructure-related works carried out by distribution licensees on behalf of various departments of the Delhi Government.

According to the amendment, a new provision has been added to Regulation 24 of the principal regulations. It specifically addresses works such as the shifting of high-tension and low-tension lines, electrification of bus depots, and other similar infrastructure projects managed by distribution companies. The regulation now outlines clear stages for the execution of such works, which include design and procurement, execution and installation, and testing, commissioning, and final handover. The design stage involves survey, design finalization, and procurement of materials, while the execution stage covers civil works, cable laying, and equipment installation. The final stage includes testing, energization, and submission of a handover report.

The amendment requires distribution licensees to prepare schemes for these works based on the Cost Data Book issued by the Commission, which will be applicable on the date of scheme preparation. The payment structure for these projects has also been defined in line with Rule 172(1) of the General Financial Rules of 2017. At each stage of the work, 30 percent of the estimated cost shall be paid in advance to the licensee upon submission of a proforma invoice and an undertaking. The remaining 70 percent, along with applicable taxes, will be paid after the successful completion of each stage. For the final release, the licensee must submit the invoice, utilization certificate, and completion report.

To support distribution companies in managing their working capital until the balance payments are released, the regulation allows the inclusion of interest costs as part of the estimated project cost. This interest will be calculated based on the State Bank of India’s marginal cost of funds-based lending rate for one year, applicable on the first of April of the financial year, plus 350 basis points.

Another important provision of the amendment states that distribution companies will not be required to provide bank guarantees for advance payments released to them by government departments. However, they must submit an undertaking that if the works remain incomplete, the recovery of advances will be adjusted with the Annual Revenue Requirement of Delhi Transco Ltd., which will then transfer the amount to the concerned government department.

The regulation further ensures that in cases where payment of the balance 70 percent is delayed beyond 45 days after submission of the final invoice and required documents, the distribution company will have the right to recover interest on the delayed amount at the same rate linked to SBI’s MCLR plus 350 basis points. Importantly, the amendment makes it clear that the cost of such infrastructure-related works will not be passed on to electricity consumers in Delhi and will not be considered in the Annual Revenue Requirement of the distribution companies.

This amendment aims to provide a structured framework for the timely and transparent execution of government-related electrical infrastructure works, while ensuring financial clarity and consumer protection.