Chief Minister Arvind Kejriwal called the first-of-its-kind policy "a revolutionary and very innovative" decision that would make power distribution companies directly accountable to the people.
Under this policy, power distribution utilities are required to fix any problem within 60 minutes.
If the distribution company isn't able to meet this deadline, then they would have to pay a penalty of Rs 50 per hour to each consumer who files a claim for the first two hours followed by Rs 100 per hour after two hours.
There are three private companies that supply electricity in Delhi --- BSES Yamuna Power Limited, BSES Rajdhani Power Limited and Tata Power Delhi Distribution Limited.
Because Delhi doesn't have smart meters, people will have to log their complaints with the power distribution company as soon as the power supply is disrupted. This can be done by sending a "no current" text message to the designated phone number, email, phone app or a website along with their basic details.
The power distribution company shall respond when the power supply resumes.
"Whenever the permissible time limit is over", the company shall automatically credit the penalty into the account of the consumers without any manual intervention.
The penalty shall be adjusted in the consumer's monthly bill.
"The most important thing in a scheme is its workability. This is workable, especially if you lodge the complaint. Then the full audit trail is these," Varsha Joshi, who heads the city's power department said.
Ms Joshi said the system would be completely automated once smart power meters are universally used. These would be able to send data remotely to that "second-to-second data" could be analysed from the command centre.
In theory, power companies won't have to pay the fines if they limit each power cut to less than 60 minutes.
On Twitter, Ms Joshi said this shouldn't be a worry since this assumes that power companies like to disrupt power supply.
Power cuts happen in Delhi when local lines or transformers develop faults due to overloading the system. "Delay in repair due to imperfect efficiency would be the main reason for prolonging the cut," Ms Joshi tweeted.
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections.