RERC Proposes Demand Flexibility And DSM Regulations 2026 To Tackle Rajasthan’s Duck Curve Challenge

The Rajasthan Electricity Regulatory Commission has issued a public notice inviting comments on its draft Rajasthan Electricity Regulatory Commission (Demand Flexibility/Demand Side Management) Regulations, 2026. The move is aimed at addressing growing operational challenges in the state’s power sector, even as Rajasthan continues to lead the country in solar energy capacity. One of the key issues highlighted is the “duck curve” problem, where solar power generation drops sharply in the evening hours while electricity demand rises, forcing utilities to depend on costly thermal power.

To deal with this challenge, the draft regulations propose a two-part approach. The first is Demand Flexibility, which focuses on shifting electricity consumption from peak evening hours to periods when solar power is available in large quantities, mainly during the day. The second is Demand Side Management, which aims to reduce overall electricity consumption through the use of energy-efficient appliances and better consumption practices. Together, these measures are expected to lower power procurement costs for distribution companies and ease tariff pressure on consumers over time.

As per the draft rules, every distribution company in Rajasthan will be required to set up a dedicated Demand Flexibility and Demand Side Management Cell. This cell will be headed by an officer of Chief Engineer rank and will be responsible for conducting load research and designing programs for different categories of consumers. The regulations also introduce Demand Flexibility Portfolio Obligations, under which Discoms must achieve flexible demand targets starting at 0.25 percent in FY 2026-27 and gradually increasing to 2 percent by FY 2029-30. To ensure seriousness in implementation, the framework proposes financial incentives and penalties of INR 0.20 crore per megawatt linked to performance.

The draft regulations also bring in the concept of Aggregators. These entities will help small consumers, such as electric vehicle owners or users of smart appliances, participate in demand flexibility programs by combining their loads and offering them as a single resource. Special attention has been given to the agricultural sector, with plans to use the PM-KUSUM scheme to shift irrigation pumping to daytime hours when solar power is widely available.

To make sure that these programs deliver real benefits, the Commission has laid down strict evaluation requirements. All programs must pass the Total Resource Cost test to confirm overall economic benefits and the Ratepayer Impact Measure test to ensure that non-participating consumers are not unfairly burdened. Independent Verification Agencies will carry out evaluation, measurement, and verification activities to report actual energy savings and financial gains.

The Commission has invited written comments and suggestions from stakeholders, which must be submitted by February 27, 2026. Once finalized and notified in the Rajasthan Gazette, the regulations are expected to play a key role in building a more reliable, affordable, and solar-friendly power system in the state.