Telangana Prepares Framework for Demand-Side Management of Distribution Licensees

The Telangana State Electricity Regulatory Commission (TSERC) has released the draft regulations for demand-side management (DSM) initiatives of distribution licensees (DISCOMs).

DSM involves planning, executing, and monitoring a DISCOM’s activities designed to encourage consumers to change their usage patterns, concerning both timing and volume of electricity consumption. DSM helps grid operators improve the efficiency and stability of the power grid by flattening the electricity load curve. Another important benefit is that it helps the DISCOMs plan their costs as well as the ways of recovering it through tariffs or any other method.

The regulations will apply to all the state distribution licensees and come into force from the date they are published in the Telangana Gazette.

As per the proposed regulations, the distribution licensee should assess the potential for DSM in its area of supply one year before the start of every control period.


The Commission will establish DSM targets for each distribution licensee in the state. While establishing the targets, the Commission will consider the state’s technical potential as assessed by the distribution licensee.

Every distribution licensee should also constitute a DSM cell within one month of these regulations’ notification. The DSM cell will be responsible for load research and development of baseline data and a DSM plan formulation. It will also be responsible for the development of DSM projects and the implementation of related programs.

According to the proposed regulations, the distribution licensee should undertake load research to identify the target. It should also undertake market research to estimate the market potential for specific energy efficiency applications and determine existing baseline market conditions. Based on the results of load and market research, the distribution licensee should develop baseline data for its area of supply. The distribution licensee should design, develop, and implement the initial DSM programs based on the available data until the complete baseline data is available for its area of supply.

The regulations proposed by the Commission further state that the distribution licensee should formulate and submit to the Commission a DSM plan covering the control period within one year of notification of these regulations. The plan should include an overall goal for the DSM plan and a description of programs that form a part of the DSM plan. The plan should also have the implementation process and schedule of each program in the plan.

The distribution licensee should also submit all the relevant DSM programs along with an annual plan consistent for the upcoming year and the yearly performance review.

Also, the distribution licensee should submit the DSM plan for approval at least six months before the multi-year tariff control period’s commencement.

The Commission will approve a DSM program only if it is in tune with the regulations’ objectives. The distribution licensee should implement activities assigned to it either by itself or through appropriate independent entity engagement.

The distribution licensee should identify the net incremental costs associated with the planning, design, and implementation of the programs. It should also propose a methodology for the recovery of total costs through tariffs or any other mechanism.

Finally, the distribution licensee should prepare a plan for evaluating, measuring, and verifying each DSM program and submitting it to the Commission.

The evaluation, measurement, and verification of DSM programs may be undertaken by the Commission or third-party agency assigned by the Commission. The reports on the DSM plan’s progress and expenses incurred on implementing the DSM plan should be submitted by the distribution licensee every six months. The distribution licensee should prepare and submit a detailed program completion report and submit to the Commission within one month of completing such a program.

In January this year, the Ministry of Power released its State Energy Efficiency Index 2019 report, which keeps tabs on the progress made by the Indian states and union territories regarding energy efficiency initiatives. According to the report, the top-performing states -Haryana, Karnataka, and Kerala – fell under the ‘achiever’ category. Nagpur, Manipur, and Jammu and Kashmir scored the lowest and fell under the ‘aspirants’ category.