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39 discoms submit draft proposals under 3 trillion power reform scheme

India’s electricity availability has increased to 22 hours in rural areas and 23.5 hours in urban areas according to union power and new and renewable energy minister Raj Kumar Singh. (REUTERS)Premium
India’s electricity availability has increased to 22 hours in rural areas and 23.5 hours in urban areas according to union power and new and renewable energy minister Raj Kumar Singh. (REUTERS)

  • The scheme aims at reducing the AT&C loss to 12-15% and eliminating ACS-ARR gap at pan India level by FY 2024-25 with the funds to be released to discoms subject to them meeting reform-related milestones

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New Delhi: Meghalaya and Assam have become the frontrunners in planning their operational and financial reforms, with 39 out of 55 beneficiary electricity distribution companies (discoms) submitting their draft proposals under the 3 trillion Revamped Distribution Sector Scheme.

This comes in the backdrop of the government rolling out the marquee power discom reform scheme, wherein the Centre’s share will be 97,631 crore. The scheme aims at reducing the AT&C loss to 12-15% and eliminating ACS-ARR gap at pan India level by FY 2024-25 with the funds to be released to discoms subject to them meeting reform-related milestones.

“State Governments of Meghalaya and Assam have become the frontrunners in planning their operational and financial reforms as well as the underlying works to accomplish the same under Revamped Distribution Sector Scheme (Nodal Agency – REC). Accordingly, their state-level Distribution Reforms Committee (DRC) and State Cabinet have approved the proposals, including Action Plan and DPR, for consideration under the scheme," union power ministry said in a statement on Sunday.

Finance minister Nirmala Sitharaman in her third union budget announced the scheme to help reduce losses and improve the efficiency of discoms. Mint reported about the proposed scheme on 16 December 2020.

“Reform measures aim towards loss reduction, implementation of smart prepaid metering, 100% feeder level energy accounting by FY 23, up-gradation of billing and other IT/OT systems," the statement added.

India’s electricity availability has increased to 22 hours in rural areas and 23.5 hours in urban areas according to union power and new and renewable energy minister Raj Kumar Singh. The country’s electricity demand has picked up after the dip during the second wave of the coronavirus pandemic. As part of its energy transition efforts, India is also working towards electrification of the economy by developing action plans for the greening of electricity.

“The action plans from the states include multiple reform measures aimed towards loss reduction, implementation of smart prepaid metering of majority of their consumer base, 100% feeder level energy accounting by FY 23, reconductoring of old/frayed conductors, conversion to LT ABC, bifurcation of feeders, segregation of agriculture feeders, and up-gradation of billing and other IT/OT systems, in addition to works towards improving quality and reliability of supply. Under these plans, the State Governments have also committed to ensuring the financial viability of the discoms, such as liquidation of outstanding subsidy dues and government department dues, implementation of tariff reforms, measures to enhance consumer services etc. These proposals would now be put forward to the monitoring committee set up by the ministry of power for approval," the statement said.

There is a compulsory prepaid and smart metering component to be implemented across the power distribution chain, including in about 250 million households.

“Key interventions envisioned under this program include providing support to discoms to undertake activities for ensuring 100% System metering, implementing Prepaid Smart Metering, Energy Accounting, and implementing infrastructure works for Loss Reduction, as well as for Modernization and System Augmentation aimed at improving the quality and reliability of power supply," the statement said.

“In addition, segregation of feeders dedicated only for the supply of power for agricultural purposes, which are proposed to be solarized under the KUSUM scheme, will be sanctioned on priority under the scheme. Along with their proposals, discoms will also need to submit an Action plan for strengthening their distribution system and improving performance by way of various reform measures targeting improvement in operational efficiency, financial viability and quality and reliability of power supply," the statement added.

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