Initiative by Forum of Regulators in
DSM
24th January,2012
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FOR Introduction
• The Forum of Regulators (FOR) was constituted
on 16th February, 2005 in pursuance of the
provision under section 166(2) of the Electricity
Act, 2003.
• Section 166 (2) The Central Government shall also
constitute a forum of regulators consisting of the
Chairperson of the Central Commission and
Chairpersons of the State Commissions.
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Initiatives of FOR on DSM
• REPORT OF THE WORKING GROUP ON “DSM & ENERGY
EFFICIENCY IN SEPTEMBER ,2008
• REPORT ON INSTITUTIONALISING ENERGY EFFICIENCY &
DEMAND SIDE MANAGEMENT IN UTILITY SECTOR IN
INDIA JUNE 2010
• MODLE REGULATIONS ON DEMAND SIDE MANAGEMENT
IN MAY 2010
• COST BENEFIT ANALYSIS OF DSM PROGRAMME
• REGULATED MULTISTATE DEMAND SIDE MANAGEMENT
PROGRAMME
• CAPACITY BUILDING PROGRAMME on DSM & EE
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Major recommendations of FOR on
DSM
FOR has brought out a strategy report with certain key
recommendations.
1) DSM cells should be constituted in all the distribution utilities.
2) The State Governments should consider financially supporting
the DSM programmes and reduction in taxes on energyefficient appliances.
3) Recovery of cost of approved DSM programmes should be
allowed as pass through in Annual Revenue Requirement
(ARR).
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SERCs to direct all the distribution utilities to submit DSM Plans along
with ARR rates for the next tariff period.
•
Recovery of cost of approved DSM programmes should be allowed as
pass-through in ARR.
•
Bureau of Energy Efficiency has been requested
– to undertake development of Monitoring and Verification protocols for
various DSM programmes which may be undertaken by utilities.
– to prepare draft of a suggested Regulation for appraisal of programmes
of DSM and Energy Efficiency in distribution sector.
• The State Governments to be requested to consider the
following:
– Financially supporting the DSM programmes aimed at such
category of consumers which are receiving tariff subsidy
from the State Governments.
– Enhancing effectiveness of the State Designated Agency
(SDAs).
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– Reduction in taxes on energy efficient appliances.
Model regulation of DSM
DSM Model Regulations have been finalized by FOR
Salient features :
• Regulations provide for DSM Objectives and targets to be set by the SERC
for the Distribution Licensee.
• Provide for guidelines on various aspects of DSM processes:
– Load and market research,
– Implementation of DSM programmes,
– Cost Effectiveness Assessment of DSM programmes,
– Monitoring and Reporting and Evaluation,
– Measurement and Verification of savings through DSM programmes;
– Eligibility criteria for DSM programmes,
– Guidelines for setting targets;
– Database development framework guidelines etc.
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• Every DISCOM must create a DSM cell to plan ,develop monitor
and implement DSM initiatives on a sustained basis.
• Every DISCOM should be directed to prepare DSM plan and
provide budget for its implementation.
• Recovery of cost on the DSM should be allowed as a pass through
in ARR.
• Result of DSM programmes/projects should be got verified by third
party measurement and verification experts.
• Load research should be taken up systematically because it would
provide insight into consumer load profile which will help DISCOM
in rate design ,load forecasting, load control and load management.
• SERCs may provide a special rebate in tariff to those buildings
premises (both old and new )which are certified (on annual basis )by
agencies authorized by BEE.
• Concerned authorities could consider mandating installation of starrated energy efficiency pumps sets in those areas where continuous
heavy pumping is required such as municipal water works ,sewages
work ,and lift canals.
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Status on DSM Regulation at State
Level
• Jammu & Kashmir, Tripura ,Himachal &
Maharashtra have issued regulations on DSM.
• Punjab, Assam,Kerala and Gujarat have issued
draft Regulation on DSM.
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Guidelines on Cost Benefit Analysis
• Guidelines for cost effectiveness assessment are required to
be issued by the SERCs.
• DSM programme to be approved if Cost Effectiveness Index
(CEI) for a particular DSM programme is greater than one and
the Cost of Conserved Energy (CCE) for consumers is less than
average tariff paid by that category of consumers.
• In programmes where distribution licensee is bearing all costs
of DSM programme, the Cost of Conserved Energy (CCE) is not
applicable.
• The cost in the DSM process such as costs of load and market
research, potential assessment, design and development of
DSM plan and other administrative costs shall be approved by
the Regulatory Commission on ‘case to case’ basis.
• Detailed analysis of costs and benefits should be undertaken
at the stage of preparation of Programme Document.
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Key Policy Objectives of Regulated Multi State
Demand Side Management Programme(RMSDP)
• Promote long term utility based DSM.
• Reduce transaction costs by bundling future demand across several
states/ regions - higher demand to stimulate reduction in prices necessary to sustain the market in the long run.
• Enhance the ease of administering the programme - simpler and
more robust evaluation and monitoring, leading to greater
transparency and accountability.
• Enable design and deployment of appliances that are better suited to
Indian conditions and accelerated adoption of superior technology.
• Facilitate better coordination with the Standards and Labeling
program and allow rapid ratcheting-up of energy performance
standards.
• Significantly accelerate the pace of market penetration of super
efficient appliances in the market.
• Enable India to take leadership position in designing, developing
and implementing such a programme – eg. SEAD
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RMSDP – Leveraging Energy Savings
Establishment of SEE
Establish specifications for
‘super-efficient’ devices
Cost-benefit analysis and
of period of incentive
Regulatory Approvals
Allow regulatory charge as
a part of ARR of Utilities
Creation of DSM fund for
collection of regulatory
charge
Implementation of RMSDP
Monitoring sale of SEE in
Utility coverage area
Allow payment of
incentives to manufacturers
Labeling of
‘superefficient’
equipments
(SEE)
Determination
of incentives
based on peak
load reduction
Monitoring
sale of SEE,
verification
and incentive
payout
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FOR has given In-principle approval
1. To allow regulatory charge as a part of ARR of
Utilities.
2. To allow creation of DSM fund for collection of
regulatory charge.
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Training Programme Details
• FOR conducted a DSM Training Workshop, at CERC, Delhi
,March 2-5, 2009
• A six days residential training programme on ‘Demand Side
Management and Energy Efficiency” from 2nd to 7th March,
2009 ,NPTI, Faridabad.
• A Three Days Residential Training Programme on “DSM &
Energy Efficiency” from 16th to 18th November, 2010 ,NPTI,
Faridabad.
• A Training Programme on ‘Demand Side Management’
Capacity Building from 10th to 14th October, 2011, IIT,
Roorkee.
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MOU of FOR with International
Bodies

FOR has entered into an MOU with the California Energy
Commission and the California Public Utilities Commission
(CPUC) and the Lawrence Berkeley National Laboratory (LBNL).

As part of this MOU, the Parties will endeavor to promote
information exchanges and future joint research activities in the
areas of Energy efficiency and Demand-Side Management policies
and programs.

Already, under the MOU, DSM experts from LBNL, CPUC and
CEC have conducted three training programmes for the personnel
from state Regulators and DISCOMS.

The programmes were conducted in 2009/10/11
which covered DSM, DSM programme design and
load research.
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Thank You
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Model regulation of DSM
The DSM Model Regulations have been finalized by FOR
The salient features are•
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The Commission shall formulate DSM objectives taking into consideration the
National DSM Objectives/ Plans formulated by BEE .
Distribution Licensee shall be guided by methodology developed by Bureau while
assessing of technical potential for DSM.
The Commission shall establish DSM targets for each Distribution Licensee in the
State.
The Commission shall issue guidelines from time to time for the following activities
1. Load and Market research
2. Implementation of DSM programmes.
3. Cost Effectiveness Assessment of DSM programmes
4. Monitoring and Reporting of DSM Plans and Programmes
5. Eligibility criteria for DSM Programmes
6. Methodology for setting DSM targets and funding levels
7. Database development framework
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Every Distribution Licensee shall, constitute DSM Cell .
Distribution Licensee shall undertake load and market research and develop a
necessary database .
Distribution Licensee shall formulate DSM Plan.
The Commission shall review and approve a DSM plan.
For each DSM programme cost benefit analysis shall be carried out as per guidelines
issued by the Commission on Cost effectiveness from time to time .
Prior to implementing any DSM programme, Distribution Licensee must obtain
approval of the Commission
Distribution Licensee shall undertake implementation of DSM programmes in line
with the guidelines issued by the Commission from time to time
The cost recovery of each program must be approved prior implementation.
Distribution Licensee shall prepare plan and undertake monitoring and reporting of
DSM programmes as per Guidelines
Distribution Licensee shall prepare plan for evaluation, measurement and
verification of savings from DSM programmes as per Guidelines
DSM Plan and Programme Completion Report shall be submitted to the
Commission.
The Commission may provide incentives to Distribution Utilities for achieving or
exceeding DSM Objectives.
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• Guidelines may be modified without modifying Regulations.
• Provides for various activities to be undertaken in the DSM
framework
– Load research and development of baseline data,
formulation of DSM Plan, Commission review and
approval of DSM plan, preparation and approval of DSM
Programme Document, and implementation of DSM
programmes
• Third party intervention in performing the most important task
such as Evaluation, Monitoring and Verification is envisaged
and responsibility has been kept with SERC;
• Considering the reach of the Distribution Utility, most of
the execution related tasks have been assigned to them. In
addition, the responsibility of assessment of technical
potential and market research has been placed on them.
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Model regulation of DSM
The DSM Model Regulations have been finalized by FOR
The salient features are-
• Every DISCOM must create a DSM cell to plan ,develop monitor and implement DSM
initiatives on a sustained basis, and staff this DSM cell with dedicated staff and equip it
with dedicated resources and budgets.
• Every DISCOM should be directed to prepare DSM plan and provide budget for its
implementation.
• Recovery of cost on the DSM should be allowed as a pass through in ARR. Pre-identified
source of funds such as penal interest on late payment bills, load management charges could
be earmarked for financing DSM activities.
• DSM bidding mechanism developed and institutionalized for implementation of DSM
projects aiming at targeted saving in terms of MW of load avoided and/ or kwh of energy
purchase avoided in identified places such as distribution transformer ,feeders, or bulk
consumer such as airports ,commercial complexes, etc. The cost could be partly founded by
the DSM plan of the utilities.
• Result of DSM programmes/projects should be got verified by third party measurement and
verification experts.
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• Load research should be taken up systematically because it would only
provide data on impact of DSM initiatives in terms of savings in energy
and reduction in demand, but it would also provide insight into consumer
load profile and data on cost service ,data on profitability analysis, and
would also help DISCOM in rate design ,load forecasting, load control and
load management.
• Power procurement plans should take into consideration the project feasible
savings through Energy conservation and Energy efficiency measures.
Capacity building of staff of the SERCs and the utilities through domestic
/international visits to places where DSM has been successfully
implemented should also be included in DSM plans.
• BEE should promote development of ESCOs for implementing DSM
projects ,especially in area of energy efficient air conditioning in large
offices/commercial complexes and municipal street light.
• SERCs may provide a special rebate in tariff to those buildings premises
(both old and new )which are certified (on annual basis )by agencies
authorized by BEE ,to be compliant with ECBC.
• Concerned authorities could consider mandating installation of star-rated
energy efficiency pumps sets in those areas where continuous heavy
pumping is required such as municipal water works ,sewages work ,and lift
canals
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