New Delhi, Sep 16 (IANS) Union Power Minister Manohar Lal on Tuesday urged the state governments to implement reforms required to reduce the debt burden of distribution utilities to improve their efficiency so that they can provide quality and reliable power supply to consumers.

Addressing a meeting with the power ministers of states, in the presence of Shripad Yesso Naik, Minister of State for Power, Manohar Lal highlighted the importance of operational and financial health of distribution utilities in ensuring quality power supply to the public.

He said that collaborative efforts by the Central Government, state governments and regulatory commissions are required to implement necessary reforms that ensure the viability of the power sector. He emphasised the need for early installation of prepaid smart meters in all government establishments.

The minister urged the states to reaffirm the commitment of “Power for all, at all times”, in a manner that is efficient, environmentally sustainable and cost-effective.

During the meeting, it was deliberated that the regulatory commissions must issue full cost tariff, and the state governments may provide subsidy if required. It was also discussed that in view of the gravity of the debt situation, there was a need to recognise the debt of the distribution utilities as the liability of the state governments.

The key points of discussion included the role that the state governments and the regulators should play for ensuring cost reflective tariff, and for ensuring timely payment of subsidies and government department dues, expediting smart metering works, increasing the use of data analytics to improve power purchase optimisation and demand forecasting. The deliberations were also held for drafting the broad contours of the new scheme to be proposed by the group of ministers (GoM) for debt restructuring of distribution utilities.

The Secretary (Power) highlighted the need for taking reform measures to restore the financial viability of distribution utilities and also simultaneously ensuring that these reforms are so structured that the improvements made as a result are irreversible and the situation of debt trap doesn’t arise again. He mentioned that the GoM has been constituted for this purpose and aims to identify requisite reform measures.

Joint Secretary (Distribution), Ministry of Power, briefed about the key reasons for continued unviability of distribution utilities which in turn gets manifested in suboptimal service delivery to consumers. He further informed that the high cross-subsidy being levied has resulted in expensive cost of manufacturing affecting their competitiveness. The prevailing losses of the distribution companies have led to the sector becoming less attractive for private investment.

Additional Secretary, Ministry of Power, also made a presentation on the proposed Electricity (Amendment) Bill which could create an enabling environment for improving financial viability of utilities, facilitating ease of living and doing business, promoting energy transition, strengthening the regulatory framework and optimizing distribution network utilisation, according to the ministry.

–IANS

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