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Centre’s proposed power scheme aims at prepaid metering for all by March 2025

A new power scheme of the Centre aims at 100% prepaid metering for all consumers by March 2025 to make discoms (distribution companies) financially viable to supply 24x7 electricity to all
UPDATED ON MAR 22, 2021 12:12 AM IST

A new power scheme of the Centre aims at 100% prepaid metering for all consumers by March 2025 to make discoms (distribution companies) financially viable to supply 24x7 electricity to all.

Known as the Revamped Reforms-Linked Result-Based Distribution Sector Scheme, the project is proposed to be launched by the month-end.

The scheme also seeks installation of communicable meters integrated with advance metering infrastructure (AMI) for all distribution transformers (DTs) and feeders. There will be a unified billing and collection system.

As per the draft guidelines circulated to the states, including UP, the scheme will have a total outlay of 3,03,758 crore with an estimated gross budgetary support (GBS) from Central government to the tune of 97,631 crore subject to the performance of a discom that wants to participate in the scheme.

The scheme lays a lot of focus on metering, and that too prepaid meters or smart meters in prepayment mode, for all the consumers as a tool to reduce discoms’ aggregate technical and commercial (AT&C) losses and eliminating the gap between the per unit average cost of supply (ACS) and the average revenue realization (ARR).

“The discoms inter alia should lay down the roadmap for bringing down AT& C losses to 10-15% and ACA-ARR gap to zero by 2024-25 and project the requirement of financial support required from the state government towards payment of government dues and subsidies each year for the entire scheme duration,” the guidelines for the scheme say.

The new scheme will be in effect for five years beginning 2021-22. March 31, 2026 will be the sunset date beyond which no Central funds will be released.

Under the proposed scheme, the Central government grant will be 15% of the cost per meter subject to the maximum of 900/meter for consumer metering.

“If a discom does not submit the action plan, detailed project report (DPR) for metering component and other infrastructure work by September 2021, then the total eligible sanction amount may be restricted to 50%,” the guidelines say.

The funding, they further clarify, will be available only if the discom agrees to operation of prepaid meters or smart meters in prepayment mode for consumers, and in accordance with the uniform approach indicated by the Central government.

“All discoms that have initiated their smart metering tenders after January 1, 2020 will be eligible for funding, only if the prepaid smart metering works are done,” they say.

The scheme requires all applicant discoms to prepare individual action plans for strengthening their distribution system and to improve their performance by way of various reform measures.

Discoms are also supposed to spell out major works like metering and distribution infrastructure works, along with their estimated cost, giving priority to distribution measures that are required for AT&C loss reduction.

There is also a provision for the appointment of a Project Management Agency (PMA) by each discom..

A tripartite agreement, under the scheme, will be signed among the state government, discom and the Central government for undertaking and agreeing to their stipulated roles and responsibilities. Intermittent assessment of performance of discoms will be done.

People dealing with the issue here in the energy department said the government and UP Power Corporation Ltd will send their comments on the scheme by March 24 as told by the Centre.


Improve the quality, reliability, and affordability of power supply to customers through a financial sustainable and operationally efficient distribution sector.

Reduce the AT&C losses to pan-India levels of 12-15% by 2024-25.

Reduce per unit average cost of supply and per unit average revenue realisation gap to zero by 2024-25.

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