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Central govt offices to pay in advance for energy use
The decision is in sync with the ₹3.05 lakh crore “revamped reforms-based result-linked power distribution sector scheme” that finance minister Nirmala Sitharaman announced in the Budget on February 1, they said requesting anonymity.
The government has allowed central ministries and entities under their control to pay for energy consumption in advance without seeking bank guarantees from power distribution companies (discoms) in a significant step to promote smart pre-paid meters, two officials said.
The decision is in sync with the ₹3.05 lakh crore “revamped reforms-based result-linked power distribution sector scheme” that finance minister Nirmala Sitharaman announced in the Budget on February 1, they said requesting anonymity.
This assumes significance given that outstanding dues of government departments accounted for ₹48,664 crore at the end of the 2020-21 financial year.
Advance payment of electricity bills is central to smart pre-paid meters, a key component of power distribution reforms, one official said.
“As the government and its agencies are major power consumers, it wants to set an example. But existing rules prohibited them from making advance payments for goods and services. Thus, it has been decided to explicitly exempt government offices from the (existing) requirement of taking bank guarantees (BGs) for advance payment of electricity bills,” he said.
India is launching the world’s largest electricity smart metering programme to replace 250 million conventional metres one of the measures to reduce the aggregate technical and commercial (AT&C) losses from 21.83% in 2019-20 to 12-15%, and close the gap between the average cost of supply and average revenue per unit from 28 paise in 2019-20 to zero by 2024-25, a second official said.
As the first step, the Union power ministry earlier issued an advisory to all central government ministries to direct organisations under their administrative control to switch to prepaid smart meters.
Union power minister RK Singh told the Rajya Sabha on August 3 that it will provide financial support to eligible discoms “for upgradation of the Distribution Infrastructure and Smart Metering Systems for the network as well as prepaid smart metering systems” for consumers as part of the ₹3.05 lakh crore scheme.
In her Budget speech, Sitharaman said: “The scheme will provide assistance to discoms for Infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems, etc., tied to financial improvements.”
The discoms’ access to the fund will depend on their plans to reduce the losses along with state government’s approval, the second official cited above said. According to official data, as on June 30, 2021, discoms owed ₹90,082 crore to power generating companies.
Mint reported on June 26 that discoms in the Union territory of Jammu and Kashmir (J&K) posted the highest losses among utilities in India. Discoms in eastern and northeastern states have also reported high losses. AT&C losses in J&K were recorded at 60.5% in the year ended March 2020, followed by Nagaland (52.9%), Arunachal Pradesh (45.7%), Bihar (40.4%), and Tripura (37.9%).
