{"id":238539,"date":"2023-04-18T20:33:51","date_gmt":"2023-04-18T15:03:51","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=238539"},"modified":"2023-04-19T13:25:50","modified_gmt":"2023-04-19T07:55:50","slug":"there-are-fresh-signs-that-power-distribution-has-turned-a-corner","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/there-are-fresh-signs-that-power-distribution-has-turned-a-corner\/","title":{"rendered":"There are fresh signs that power distribution has turned a corner"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cThere are fresh signs that power distribution has turned a corner<\/strong>\u201d published in Mint <\/strong>on\u00a018th<\/sup> April 2023<\/strong>.<\/p>\n

Syllabus: GS 3 \u2013 Infrastructure<\/strong><\/p>\n

Relevance: <\/strong>About the condition of Discoms<\/strong><\/p>\n

News<\/strong>: The article explains the problems faced by the Discoms and measures that have improved their conditions.<\/p>\n

What are the problems faced by India\u2019s power distribution sector?<\/strong><\/h2>\n

India\u2019s power distribution sector has faced multiple structural problems<\/strong>.<\/p>\n

Most distribution utilities (discoms) have suffered from increasing aggregate technical and commercial (AT&C<\/strong>) losses, widening financial losses<\/strong> and growing debt burdens.<\/strong><\/p>\n

Tariff revision in several states has lagged behind the increase in electricity prices, ultimately leading to growing disparities between supply costs and income.\u00a0<\/strong><\/p>\n

This has made discoms unable to make timely payments to generation and transmission companies, and lagging investments in long-term infrastructure.<\/p>\n

However, the 11th Integrated Ratings and Ranking report<\/strong> on discoms released by the Union Power Ministry suggests that conditions of discoms are improving.<\/p>\n

What are the findings of the 11th Integrated Ratings report?<\/strong><\/h2>\n

Despite an 8% increase in total gross input energy, the gap between expenditure and income on a cash-adjusted basis (ACS-ARR Gap<\/strong>) reduced substantially<\/strong> to \u20b953,000 crore in 2021-22 compared to \u20b997,000 crore in 2019-20.<\/p>\n

Rajasthan, Maharashtra, Karnataka, Madhya Pradesh and West Bengal were the major contributing states.<\/p>\n

The sector wide cash-adjusted ACS-ARR gap per unit has improved<\/strong> to 40 paise, down from 79 paise in 2019-20 and 89 paise in 2020-21.<\/p>\n

AT&C losses reduced<\/strong> to 16.5% in 2021-22, lower than 19.5% in 2019-20 and 21.5% in 2020-21. Bill collection efficiency increased by over 3% to reach 96% in 2021-22.<\/p>\n

While the sector’s debt level is high, the rate of increasing debt is reducing.<\/strong> The average debt service coverage ratio for the sector also turned positive.<\/p>\n

What has led to this improvement?<\/strong><\/h2>\n

This is because of the Revamped Distribution Sector Scheme (RDSS)<\/strong><\/a>.<\/p>\n

Further, several state governments have also taken proactive actions. They have provided close to \u20b956,000 crore of equity, via capital grants for loan takeovers<\/strong>, in the past three years.<\/p>\n

State governments paid out 100% of the tariff subsidy amount<\/strong> for 2021-22, as well as clearing certain backlogs.<\/p>\n

Karnataka, Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh and Punjab<\/strong> are the states that have shown most improvement in subsidy disbursal.<\/p>\n

Discoms have also taken significant steps by replacing physical bill generation and payment with digital billing and online payments to ease collections.<\/strong><\/p>\n

The majority have shifted to Ind-AS accounting standards.<\/strong><\/p>\n

What more can be done to improve the condition of discoms?<\/strong><\/h2>\n

Adopting certain rules and practices:<\/strong> Reforms like the Late Payment Surcharge Rules 2022<\/strong> and the requirement for energy accounting and auditing<\/strong> may be crucial in resolving AT&C losses and paying off transmission company debt.<\/p>\n

Efforts by Discoms:<\/strong> Discoms must adopt improved accounting practices like adopt Ind-AS, prepare quarterly accounts, and conduct energy audits.\u00a0They also need enhanced data analytics capabilities<\/strong> to leverage smart infrastructure and identify opportunities to reduce AT&C losses.<\/p>\n

It is also important to expedite capital projects for a wider smart-meter rollout, and to strengthen the system utilizing RDSS funds.<\/p>\n

Efforts by State Govt.:<\/strong> State governments must disburse full tariff subsidy amounts and clear past arrears in a timely manner.<\/strong> Regulators must also ensure timely issuance of cost- reflective tariff orders.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cThere are fresh signs that power distribution has turned a corner\u201d published in Mint on\u00a018th April 2023. Syllabus: GS 3 \u2013 Infrastructure Relevance: About the condition of Discoms News: The article explains the problems faced by the Discoms and measures that have improved their conditions. What are the… Continue reading There are fresh signs that power distribution has turned a corner<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501,11125,7383,11451],"class_list":["post-238539","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","tag-mint","tag-power-distribution-sector","tag-revamped-distribution-sector-scheme","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/238539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=238539"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/238539\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=238539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=238539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=238539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}