NEW DELHI: While taking note of the Delhi Electricity Regulatory Commission's "reluctance" to use penal powers in case of non-compliance, a report on regulators in the country has however complimented it for standing out among regulatory commissions for having imposed penalties on licensees for "under-achievement".

The report on "The Practice and Politics of Regulation" released recently by the National Institute of Public Finance and Policy and the Indian Institute of Management, Bangalore, says: "In sum, the DERC stands out among regulatory commissions for having imposed a substantial penalty on a licensee for performance, here for under-achievement of investment."

Authored by Dr. Navroz K. Dubash, Associate Professor at the Centre for the Study of Law and Governance in Jawaharlal Nehru University and D. Narasimha Rao, doctoral student at Stanford University, the study - which examines how electricity regulators in three states, Andhra Pradesh, Karnataka and Delhi, function in practice -- states: "It [DERC] also penalised behaviour that was anti-consumer, but the approach to doing so shifted dramatically in late 2005, with a new set of regulators using the penalty power far more freely than the first regulator appeared willing to do."

Prior to this period, the report notes, the DERC appeared "at pains not to be perceived as an aggressive and intrusive enforcer, especially in the start up phase of electricity reforms in the State".

DERC's role in scrutinising the investment claims made by companies has also been appreciated.

"The Commission did take several steps towards careful scrutiny of investment plans. In particular, the DERC reduced the expenditure allowed well below that submitted by the discoms on a number of occasions, introduced a requirement for scheme by scheme scrutiny, undertook site visits to verify investment, and substantially censured what was in practice considerable under-investment against the approved amount by some of the companies, even imposing a fine on once occasion."

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