Prime Minister Narendra Modi on Saturday asked the state governments to resolve the payment crisis that undermines the financial and operational viability of the power sector entities by clearing subsidies to distribution utilities (discoms) in time and ensuring that government departments and local bodies pay their power bills before the due dates.
Stating that unpaid dues to power sector entities — gencos and discoms — stood at a staggering Rs 2.5 trillion, he said states’ subsidy dues to discoms alone were over Rs 75,000 crore at last count. About Rs 60,000 crore is required to be paid by state government departments and local bodies to discoms for the electricity consumed by them.
The Prime Minister was participating in an event to mark the culmination of ‘Ujjwal Bharat Ujjwal Bhavishya – Power @2047’ via video conferencing. He also launched the Revamped Distribution Sector Scheme, the latest package to revive discoms, on the occasion.
The scheme has an outlay of Rs 3 trillion over five years, including 32% from the central budget.
It aims to reduce AT&C (aggregate technical and commercial) losses at pan-India level to 12-15% and the ACS-ARR (average cost of supply-average revenue realised) gap to zero by 2024-25 by improving the operational efficiencies and financial sustainability of all state-sector discoms and power departments.
Currently, the ACS-ARR gap is 36 paise/unit, while average AT&C losses are around 21%.
The target under the UDAY scheme for discoms’ revival was to bring down AT&C level to 15% and eliminating the ACS-ARR gap by 2018-19-end. Discoms suffer massive losses due to power theft, meter tampering, inaccurate billing and, above all, inadequate tariff hikes. Continuous losses have also pushed discoms to a virtual debt trap, with debt stock of Rs 5 trillion at last count, a quarter of which is of Tamil Nadu utility alone.
The PM said after blending ethanol in petrol and aviation fuel, the country was now moving towards blending green hydrogen in piped natural gas pipelines, which will reduce import dependence on natural gas.
Modi said energy and power sectors have a huge role to play in accelerating India’s progress in the next 25 years. “The strength of the energy sector is also important for ease of doing business and is equally important for ease of living,” he said.
He also laid the foundation stone of various green energy projects of NTPC worth over Rs 5,200 crore. Modi also inaugurated the 100-MW Ramagundam Floating Solar Project in Telangana and the 92-MW Kayamkulam Floating Solar Project in Kerala.
He laid the foundation stone of the 735-MW Nokh Solar Project in Rajasthan, Green Hydrogen Mobility Project in Leh and Kawas Green Hydrogen Blending with Natural Gas project in Gujarat.