July 31, 2021 3:42:15 am
Power distribution companies (discoms) looking to avail funds under the government’s Rs 3.03-lakh crore reform based scheme for discoms will have to submit plans to cut losses by the end of the calendar year, Power Minister RK Singh said on Friday.
The scheme, approved by the Union Cabinet last month, requires that discoms submit detailed project reports (DPRs) on how they plan to reduce their operational losses to avail of funding. Singh said the initial timeline given to discoms was October 31 and most states had said they would be able to submit DPRs by that date.
Discoms in the country are facing severe financial instability due to high aggregate technical & commercial (AT&C) losses and large gaps between the total cost of electricity and revenues generated from supplying power (ACS-ARR gap). Singh said that the DPRs submitted by discoms would have to meet certain targets. “The required levels are AT&C losses down to 12 per cent and to bring their ACS-ARR gap down to zero in the next four years,” he added.
The new scheme replaces the UDAY scheme, launched by the government in November 2015 with the target of reducing AT&C losses to 15 per cent from 23.9 per cent in FY16 and bringing the ACS-ARR gap to zero from Rs 0.65 per unit. Average AT&C losses for Indian discoms are currently about 19.7 per cent and the cost-revenue gap is currently at Rs 0.52 per unit, according to the Power Ministry.
Singh also said that funding would only be provided to discoms if they remained on track to meet their loss reduction targets and that any deviation from their loss reduction plans would lead to funding being halted.
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