Policy change in Haryana eases burden on developers for power substations

In a significant policy shift aimed at rectifying past grievances faced by hundreds of housing societies, the Haryana government has announced a pivotal change. Developers will no longer be burdened with the responsibility of constructing power substations or providing bank guarantees for the same.
According to a notification from the Haryana Electricity Regulatory Commission (HERC), power substations will now be built by the state's power distribution companies (discoms). Developers will, however, bear the cost of the sanctioned load for condominiums or townships and are obligated to offer free land to the discoms for constructing these substations. Officials estimate that this move will substantially reduce the cost of electrical infrastructure development for builders, with savings ranging from 20% to 72%.
The background for this decision lies in persistent delays in substation construction by developers, leading to frequent power outages and supply disruptions in colonies and group housing societies developed by private real estate firms. Even when adequate power supply existed at the grid level, the lack of substations created problems. In recent years, the Municipal Corporation of Gurugram (MCG) assumed control of several private colonies; however, the electrical infrastructure remained unresolved due to the absence of substations.
Developers have long argued that they have already paid external development charges to the government and should not be additionally burdened with substation construction.
Under the previous policy, developers responsible for colonies with sanctioned loads between 6 MVA and 20 MVA were required to allocate approximately Rs 7.5 crore to Rs 8.5 crore for substation construction. Under the revised policy, these expenses will be reduced to a range of Rs 2 crore to Rs 6.8 crore. Developers will now only pay for the sanctioned load, significantly reducing their expenditure as they are no longer required to construct substations.
Moreover, the land area necessary for substations has been downsized, which is expected to further benefit developers by cutting costs.
Notably, developers of smaller residential societies with sanctioned loads of up to 5 MVA will no longer be mandated to provide land for substation construction. Instead, they will only need to cover the costs of electricity connections and the required load.
The new policy also addresses individual connections in plotted colonies. In the past, the discom supplied single-point connections to developers, who subsequently extended branched connections to individual homeowners. The updated notification streamlines this process. In addition, the revised policy eliminates service connection charges for consumers. New customers previously had to pay a service charge of Rs 500 per kW for single-phase supply and Rs 1000 per kW for three-phase supply.

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Policy change in Haryana eases burden on developers for power substations

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