APERC Releases Draft To Streamline Deviation Settlement Mechanism

APERC Releases Draft To Streamline Deviation Settlement Mechanism

The Andhra Pradesh Electricity Regulatory Commission (APERC) recently released a draft notification to incentivize consumers to amend their electricity consumption patterns. This draft aims to reform both the timing and level of electricity demand to help consumers use electricity more efficiently. 

“Andhra Pradesh State Electricity Regulatory Commission (Demand Side Management) Regulation, 2024”, aims to manage Demand Side Management (DSM), which, according to the draft, refers to “those actions of a distribution licensee beyond the consumer’s meter to alter the end-use of electricity—whether it is to decrease demand, shift it between high and low peak periods, or manage it when there are intermittent load demands—in the overall interest of reducing Distribution Licensee costs.”

Additionally, the APERC draft policy encourages the Distribution Licensee to implement DSM-related policies, activities, and programs to lower the overall cost of electricity for both consumers and the Distribution Licensee. It also promotes the economical and efficient use of resources, which includes certain measures and principles.

The policy aims to make DSM an integral part of the day-to-day operations of the Distribution Licensee, improving end-use efficiency of electricity, promoting environmental conservation, and reducing costs. It intends to control, reduce, and influence electricity demand.

Furthermore, it encourages consumers to adjust their electricity consumption patterns in terms of both timing and demand level for more efficient energy use. The policy envisions complementing supply-side strategies to help utilities avoid, reduce, or postpone costly capacity additions (generation, transmission, and distribution networks) and expensive power purchases.

DSM Process:

To manage demand side management, the latest guidelines outline the process, placing responsibility on the Distribution Licensee to conduct load research to identify target consumer segments and end users for DSM programs and to build the necessary database.

The Distribution Licensee shall undertake market research to estimate the potential for specific energy efficiency technologies and applications, establish key performance indicators, and determine baseline market conditions.

Based on the results of load and market research, the Distribution Licensee shall design, develop, and implement the initial DSM programs based on available data and studies completed by the Bureau until complete baseline data is available for its area of supply. Establishing baseline data shall not be a prerequisite for the Distribution Licensee’s design of initial DSM programs.

The Distribution Licensee shall formulate and submit to the Commission a perspective DSM Plan covering the control period within one (1) year of notification of these regulations.

As per the draft guideline, the Distribution Licensee is expected to submit the DSM Plan to the Commission for approval at least six months before the start date of the MYT Control Period. The Commission shall adopt procedures, as specified in the Conduct of Business Regulations, for approving the DSM Plan.

DSM Plan and Program Completion Report:

The Distribution Licensee shall submit reports on the progress of the DSM Plan and expenses incurred in implementing it every six (6) months.

The Distribution Licensee shall prepare and submit a detailed Program Completion Report to the Commission within one (1) month of completing such a program.

Non-Achievement of Targets:

The Commission may disallow any expenditure incurred by any Distribution Licensee for failing to achieve DSM targets as specified by the Commission, the savings envisioned, or for failure to implement the program according to the approved plan.