‘Centre helping states lower discom losses’

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New Delhi | Published: May 28, 2015 1:30:48 AM

Power and coal minister Piyush Goyal said the Centre was in constant contact with states to help them cut...

Power and coal minister Piyush Goyal said the Centre was in constant contact with states to help them cut distribution companies’ losses, adding that the performance trend of some discoms was encouraging.

“Deen Dayal Upadhyay Gram Jyoti Yojana and Integrated Power development scheme with an aggregate government expenditure of over R1 lakh crore is being provided to states for upgrading infrastructure that will go a long way in reducing their losses,” Goyal said.

Although eight top loss-making state discoms are part of the financial restructuring plan, an Icra  report indicates some discoms continue to avoid revising their tariff and bridge the revenue gap. The accumulating revenue gap has been cited by the experts as the primary cause for the worsening financial health of discoms.


Moreover, Goyal also said that an overall energy deficit has been brought down to the lowest ever at 3.6%, but an analysis of peak demand met in the last five months suggest the demand has plateaued. The same trend has been visible in the spot market for electricity where the declining purchase bids even in summer has led to an overall decline of demand.

Experts say discoms have been reluctant to buy power on long-term purchase contracts and spot markets due to a near-bankrupt condition despite existing demand. The continued sickness of the state power boards has rendered several power plants to run at sub-optimal load factors that have also witnessed a decline over the last three years.


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