Thirty-Nine DISCOMs Submit Draft Proposals Under Power Reforms Program

Meghalaya and Assam lead in planning operational and financial reforms

December 27, 2022


The Ministry of Power (MoP) has said that 39 out of 55 electricity distribution companies (DISCOMs) have submitted draft proposals under the ₹3.03 trillion (~$40.82 billion) reforms-based result-linked power distribution program.

The Ministry said that Meghalaya and Assam are the frontrunners in planning operational and financial reforms.

Critical interventions envisioned under this program include providing support to DISCOMs to ensure 100% system metering, prepaid smart metering, energy accounting, and infrastructure works for loss reduction. The program would also facilitate modernization and system augmentation to improve the quality and reliability of the power supply.

In addition, the segregation of feeders dedicated only for the supply of power for agricultural purposes, which are proposed to be solarized under the PM KUSUM program, will be approved on priority.

MoP had launched the reforms-based and results-linked, revamped distribution sector program to improve the operational efficiencies and financial sustainability of DISCOMs by providing financial assistance for modernization and strengthening of distribution infrastructure. The program also aims to improve the reliability and quality of supply to end consumers.

Of the total ₹3.03 trillion (~$40.82 billion) outlay, the central share would be ₹976.31 billion (~$13.15 billion). The states have already been allowed additional borrowing for four years up to 0.5% of gross state domestic product annually – ₹1.05 trillion (~$14.14 billion) for 2021-22, subject to specified power sector reforms.

Participation in the program is subject to pre-qualification criteria, including publication of audited financial reports, upfront liquidation of state government’s dues or subsidy to DISCOMs, and non-creation of additional regulatory assets.

The program would merge the ongoing works of the Integrated Power Development Scheme (IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).

Mercom reported earlier on how smart meters can unlock a slew of capabilities that the utilities in India badly need – increase billing efficiency, remote billing, automatic outage reporting, flexibility with time-of-use tariffs, and add new revenue streams.

In 2019, the government announced plans to replace all existing electricity meters with smart prepaid meters. The process of switching over was to be completed in three years.