The Delhi Electricity Regulatory Commission (DERC) has proposed to issue the 'Delhi Electricity Regulatory Commission (Power Regulatory Accounting) Regulations, 2014' to enable proper treatment of various accounting aspects and obtain information from power utilities in Delhi in standardized formats. A public notice in this regard was issued by the commission and comments and suggestion were sought from the public.

We feel that the draft regulation is comprehensive and proposed accounting formats will certainly reduce ambiguities with respect to valuation of fixed assets, accounting of grants and subsidies and estimating revenues of the licensees. Moreover, such accounts will make it easier to ascertain costs which are controllable and which are uncontrollable and therefore costs which could be passed on to the consumers and which should not. Given the current lack of clarity in information submitted, information asymmetry could hinder participation and consumer welfare.

This is a welcome step and we hope that it is implemented in letter and spirit. Our suggestions are mostly with respect to changes in the data formats themselves, especially with respect to the business of the licensees and with the need for more disaggregated data to aid analysis.