RERC Allows RDSS Facility To Rajasthan Discom’s Franchisee In Ajmer

The Rajasthan Electricity Regulatory Commission (RERC), in its latest judgment, ordered the rollout of the Revamped Distribution Sector Scheme (RDSS) for TP Ajmer Distribution Limited (TPADL) in Ajmer city. This comes after TPADL, a distribution franchisee of the Ajmer Vidyut Vitran Nigam Limited (AVVNL), moved the RERC seeking benefits of the scheme to the company.

TPADL is a Special Purpose Vehicle (SPV) of Tata Power Company that works in electricity distribution in the urban areas of Ajmer City in Rajasthan. TPADL and AVVNL had signed a Distribution Franchisee Agreement (DFA) for this for 20 years. The petitioner said it improved its performance and reduced Aggregate Technical and Commercial (AT&C) losses from 17.5 percent to 9.5 percent. 

It also claimed that it invested around Rs 94 crore to improve its performance against the commitment of a minimum capital expenditure of Rs 37.6 crore in the first five years, which it found insufficient for 20 years. The petitioner told the RERC that the norms for RDSS didn’t bar private distribution franchisees. It also batted for roll out of the scheme citing its investment in the business. 

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The Union government approved the RDSS to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs. It was meant to strengthen supply infrastructure by meeting pre-qualifying criteria and achieving minimum benchmarks. The scheme had an outlay of Rs 3,03,758 crore over 5 years from 2021-22 to 2025-25.

However, the respondent in the case AVVNL opposed this plea claiming that private entities were not applicable to the scheme. It also said that the agreement of AVVNL and TADPL was of a different model where the franchisee was paid per unit cost as agreed for 20 years for the electricity distribution. It allegedly also covered the tariff provisions and recovery. It also said that as the scheme was meant to reduce AT&C losses, and the AT&C losses of TADPL were below 12 percent, it was not eligible for the scheme.

However, the Commission, in its ordered, directed the AVVNL to ensure rollout out of the scheme for its franchisee and found it deemed to get the benefits under the scheme. It said that the scheme is meant for the consumers of the whole jurisdiction of the discoms and thus, it could not exempt areas where the discoms operate through a distribution franchisee. It, however, asked AVVNL to sign a separate agreement with TPADL for the same. 

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“In view of above it appears that only the private power companies which are working as Discoms are excluded from eligibility under RDSS. As such, there appears to be no bar on Distribution franchisee, who is authorized by Discoms to operate on its behalf, to become eligible for implementation of RDSS scheme in its area which is ultimately is the area of the Discoms,” the order said.

It also added, “The RDSS scheme is for the entire area of the distribution Licensee and the scheme does not exclude the area under Distribution Franchisee. The object of the scheme, in addition to loss reduction is also to improve reliability and quality of power supply to consumers. Therefore, consumer of Distribution Franchisee area also cannot be deprived of reliable and quality power only because the area is under Distribution Franchisee…”