The Union Cabinet has recently sanctioned a Reforms-based and Results-linked, Revamped Distribution Sector Scheme. The scheme mandates that Power Distribution Companies (DISCOMs) formulate detailed project reports (DPRs) recounting strategies to decrease their operational losses for funding considerations. Initial deadlines for DPR submission were set for the 31st of October 2021, but this has now been extended to the 31st of December 2021.
Scheme Objectives
The scheme places strong emphasis on reducing aggregate technical & commercial (AT&C) losses to national levels of 12-15% by 2024-25. Furthermore, it seeks to diminish the ACS-ARR gap, which refers to the discrepancy between the total cost of electricity production and revenues generated from power supply, to null by 2024-25.
An auxiliary objective is the creation of modern discoms with enhanced institutional capabilities, thereby improving the quality, reliability, and affordability of power supply to consumers. Rather than adopting a “one-size-fits-all” approach, each state’s implementation of the scheme will be based on a tailored action plan.
Key Features of the Scheme
One crucial feature of the scheme is Conditional Financial Assistance; the scheme proposes enhancing the operational efficiencies and financial sustainability of all DISCOMs by offering conditional financial assistance aimed at reinforcing supply infrastructure.
Subsuming of Various Programs
Current on-going projects under pre-established schemes such as the Integrated Power Development Scheme (IPDS), Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Ujwal Discom Assurance Yojana (UDAY), and Prime Minister’s Development Package (PMDP) 2015 are proposed for integration into the newly implemented scheme.
Solarization of Agricultural Feeders
The scheme underscores the importance of improving electricity supply to farmers and enabling daytime electricity via solarization of agricultural feeders. This converges with objectives of the PM-KUSUM Scheme, which focuses on solarizing all feeders to provide additional income opportunities for farmers.
Smart Metering
A significant component of the scheme is consumer empowerment through prepaid Smart metering, implemented in a public-private-partnership (PPP) mode. Smart meters allow consumers to routinely track their electricity consumption, empowering them to manage their usage based on their needs and resources. The scheme aims to install approximately 10 crore prepaid Smart Meters by December 2023 in the initial phase.
Leveraging Technology
The scheme proposes utilizing artificial intelligence to generate system energy accounting reports. This technology-enabled approach will equip DISCOMs with critical data for making informed decisions regarding loss reduction, demand forecasting, Time of Day (ToD) tariff, Renewable Energy (RE) integration, and other predictive analysis.
