Government’s new scheme for the distribution sector seeks to address one dogged problem namely financial sustainability for discoms. Called, Reforms-based and Results-linked, Revamped Distribution Sector Scheme, it has an outlay of Rs 303,758 crore and will have Rs 97,631 crore as gross budgetary support (GBS) from the centre. It is targeted at the government owned discoms, the private sector is out of its ambit. The central premise of the scheme is if state-owned discoms reduce their AT&C losses to 12-15 per cent, and ACS-ARR gap to zero, by 2024-25, then they can achieve financial sustainability.
The instruments for attaining this will be installation of smart meters and investments in supply infrastructure, the latter will be benchmarked against the discoms meeting a set of pre-qualifying criteria and basic minimum evaluation requirements. Installation of 25 crore smart meters is targeted. Of this, 10 crore will be pre-paid meters and the timeline for completion is December 2023, the first phase of the project. Prepaid smart metering will be implemented in PPP mode at consumer premises, at transformers and agricultural feeder sites, for which GBS is Rs 23,300 crore.
On the supply infrastructure front, there are many measures that have been listed: replacement of 4 lakh kilometers of overhead cables by aerial bunched cables to stop theft, installation of 10,000 separate agriculture feeders to supply cheaper solar power during the day, harnessing of AI for data analysis by discoms to make informed decisions about demand forecasting, tariff, RE Integration, etc.
Discoms wishing to enlist for the scheme will have to submit their year-wise action plan to state government who would approve it and submit it to central government. Submissions will be accepted based on certain weightages related to financial and technical performance parameters. There is also good news for gencos as no new regulatory assets (RAs) will be allowed and there is an insistence on clearing of legacy RAs while the scheme is in operation, March 31, 2026. Approved projects under existing power sector programmes will be subsumed and the savings thereof will be incorporated in this new Revamped Distribution Sector Scheme.
This is the second reform scheme for discoms announced by the BJP government. The lifecycle of the ambitious UDAY scheme ended a year earlier. Most of its targets were not met and have now been extended by another five years under the new scheme.
