DERC Sets ₹150 Crore Threshold for Intra-State Transmission Projects Under New 2024 Regulations

Introduction

The Delhi Electricity Regulatory Commission (DERC) has recently introduced a new set of regulations aimed at promoting competition and efficiency in the development of intra-state transmission projects in Delhi.[1] These regulations, effective from the date of their publication in the official Gazette, establish a threshold limit of ₹150 crores for such projects. Any new intra-state transmission project exceeding this limit will be required to be awarded through a Tariff-Based Competitive Bidding (TBCB) process.

Key Points

Threshold Limit

The DERC has set a threshold limit of ₹150 crores (excluding land costs) for new intra-state transmission projects. This means that any project with a cost exceeding ₹150 crores must be awarded through a competitive bidding process.

TBCB Requirement

All new projects exceeding the threshold limit must be awarded through a TBCB process, overseen by the Bid Process Coordinator (BPC) and guided by the Central Government’s guidelines for competitive bidding. TBCB ensures that projects are awarded to the bidder offering the most competitive tariff, promoting efficiency and cost-effectiveness.

Empowered Committee

The State Government will constitute an Empowered Committee to recommend the implementation of TBCB for eligible projects. This committee will assess the project’s suitability for TBCB and provide recommendations to the DERC.

Exceptions

The DERC may grant exemptions from TBCB for certain projects, such as those deemed critical or involving ownership interface issues, but only with prior approval. For example, projects related to defence, railways, or airports may be considered critical and may be exempted from TBCB.

Flexibility

The DERC retains the power to relax or waive any provisions of these regulations, as deemed necessary. This flexibility allows the DERC to adapt the regulations to specific circumstances and address unforeseen challenges.

Conclusion

The DERC’s new regulations are important for ensuring that intra-state transmission projects in Delhi are developed efficiently and at competitive costs. By mandating TBCB for projects above the ₹150 crore threshold, the DERC aims to attract private investment and improve the overall reliability and affordability of electricity supply in the region.

[1] https://www.derc.gov.in/sites/default/files/2.%20TBCB%20Regulations.pdf