The Andhra Pradesh State Electricity Regulatory Commission (APERC) has unveiled a comprehensive draft of new Demand-Side Management (DSM) Regulations for 2024. These regulations aim to improve energy efficiency and reduce overall electricity costs in the state.

These proposed regulations outline a series of objectives for DSM implementation, which include integrating DSM as a fundamental component of distribution licensees’ operations, exerting control over and reducing electricity demand, encouraging consumers to modify their consumption patterns, and complementing supply-side strategies to avoid costly capacity additions.

A key feature of the draft regulations is creating a DSM Cell within one month of notification. This specialized cell will conduct crucial load research, develop baseline data, formulate DSM plans, design and develop DSM projects, seek approvals, and implement DSM programs.

Establishing this dedicated unit underscores the Commission’s commitment to ensuring the effective implementation of DSM initiatives across the state.

Under the proposed regulations, distribution licensees must formulate a perspective DSM plan covering the control period and submit annual plans alongside annual performance reviews.

The strategic approach aims to ensure continuous evaluation and improvement of DSM efforts. Additionally, licensees must prepare detailed program documents for each DSM initiative and obtain the Commission’s approval before implementation, ensuring thorough scrutiny and alignment with overall objectives.

The draft regulations emphasize rigorous DSM program monitoring, reporting, and evaluation.

Distribution licensees will be mandated to submit progress reports every six months, providing a regular update on the status and effectiveness of implemented initiatives.

Furthermore, a detailed Program Completion Report must be submitted within one month of program completion, offering a comprehensive assessment of outcomes, challenges faced, and lessons learned.

To ensure impartiality and accuracy in evaluation, the Commission reserves the right to engage third-party agencies to evaluate, measure, and verify DSM programs.

Addressing the financial aspects of DSM implementation, the regulations provide mechanisms for cost recovery and potential incentives for distribution licensees.

Net incremental costs associated with DSM programs can be included in the Annual Revenue Requirement, ensuring that these initiatives do not financially burden utilities.

The Commission may introduce incentives for distribution utilities that achieve or exceed DSM objectives, creating a positive reinforcement system for effective implementation.

The draft regulations propose the creation of a DSM Consultation Committee, which will assist the licensees and the Commission in driving DSM programs. It will include representatives from distribution and transmission utilities, state energy efficiency agencies, educational and research institutions, and members from industry, agriculture, and the public.

The proposed DSM regulations represent a holistic and forward-thinking approach to energy management. By balancing consumer interests, environmental concerns, and utility operations, these regulations can significantly impact energy consumption patterns and overall efficiency in the power sector.

Recently, APERC approved a tripartite Power Supply Agreement allowing the Andhra Pradesh Green Energy Corporation, now known as AP Rural Agriculture Power Supply Company, to draw 7 GW of solar power from the Solar Energy Corporation of India.

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