Extension of DERC Business Plan Regulations, 2023 for 1 Year i.e. till FY 2026-27 – EQ

Summary:

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#### 1. Core Regulatory Action

– **What has been extended?**
All parameters of the **DERC (Business Plan) Regulations, 2023** that were applicable for **FY 2025-26** are hereby extended for **FY 2026-27**.

– **Exceptions (not extended – separate targets notified):**
– Distribution Loss Targets
– Targets for Renewable Purchase Obligation (RPO)

– **Legal Authority:**
Sections 181, 61, and 86 of the Electricity Act, 2003.

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#### 2. Distribution Loss Targets for FY 2026-27

The Commission has notified **specific distribution loss targets** for each distribution licensee in Delhi for FY 2026-27:

| Sr. No. | Distribution Licensee | FY 2026-27 Target |
|———|———————-|——————-|
| 1 | BSES Rajdhani Power Ltd. (BRPL) | 6.63% |
| 2 | BSES Yamuna Power Ltd. (BYPL) | 6.57% |
| 3 | Tata Power Delhi Distribution Ltd. (TPDDL) | 5.61% |
| 4 | New Delhi Municipal Council (NDMC) | 6.63% |

> **Business Implication:** These are the maximum allowable distribution losses. Any loss above these targets may not be recoverable through tariffs, impacting licensee profitability.

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#### 3. Key Business Points

| Parameter | Detail | Business Impact |
|———–|——–|—————-|
| **Regulatory Certainty** | Business Plan regulations extended for 1 year without change (except losses & RPO) | Utilities can plan operations without major regulatory overhaul. |
| **Loss Targets Reduced?** | Compare with FY 2025-26 targets (not given here, but typically tightened) | Pressure on discoms to improve operational efficiency, reduce AT&C losses. |
| **RPO Targets** | Not specified in this document – separate notification expected | Discoms must track separate RPO compliance requirements. |
| **Applicability Start** | 1 April 2026 (start of FY 2026-27) | Preparations needed from Q1 of new fiscal year. |
| **Tariff Determination Link** | Loss targets are referenced from DERC Tariff Regulations, 2017 (Regulation 4(9)(a)) | Losses directly impact allowed revenue and tariff calculations. |

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#### 4. Financial & Operational Implications for Discoms

| Discom | Loss Target | Implication |
|——–|————-|————-|
| **BRPL** | 6.63% | Must keep losses ≤6.63% to avoid tariff disallowance. |
| **BYPL** | 6.57% | Slightly tighter than BRPL – requires efficient distribution management. |
| **TPDDL** | 5.61% | Lowest loss target – already efficient, but little room for slippage. |
| **NDMC** | 6.63% | Same as BRPL – smaller network but similar target. |

**Common Implications for all Discoms:**
– Need to invest in loss reduction measures (smart meters, feeder segregation, theft control).
– Failure to meet targets may lead to:
– Disallowance of excess loss from tariff
– Penalties or regulatory scrutiny
– Lower allowed return on equity (RoE)

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#### 5. Regulatory Certainty Benefit

| Aspect | Benefit |
|——–|———|
| **No new business plan regulations for FY 2026-27** | Discoms can continue existing strategies without fresh compliance overhaul. |
| **Only loss & RPO targets changed** | Focused compliance – easier to manage than full regulatory change. |
| **One-year extension** | Short-term certainty – but next year may bring new regulations. |

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#### 6. Key Business Takeaways

| Takeaway | Implication |
|———-|————–|
| **Business Plan Regulations 2023 extended** | No major regulatory shift for FY 2026-27 – stable planning environment. |
| **Loss targets notified separately** | Discoms must achieve specific % losses – operational focus required. |
| **RPO targets not in this order** | Await separate DERC notification for renewable purchase obligations. |
| **Effective 1 April 2026** | New financial year brings new targets – Q1 readiness essential. |
| **Tariff link remains** | Loss performance directly affects revenue and profitability. |

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