GoM Discusses Power Distribution Viability

28 Feb 2025 CW Team

The second meeting of the Group of Ministers (GoM) on the viability of electricity distribution utilities was held in Mumbai, attended by Maharashtra Chief Minister Devendra Fadnavis and Union Minister of State for Power and New & Renewable Energy, Shripad Yesso Naik, who chaired the meeting. Ministers from Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Rajasthan, and Maharashtra, along with officials from central and state governments, Power Finance Corporation (PFC) Ltd., and REC Ltd., participated in the discussions. Naik emphasised the need for collective efforts to strengthen the power distribution sector, highlighting key performance indicators such as Aggregate Technical and Commercial (AT&C) losses, the ACS-ARR gap, accumulated losses, and outstanding debts. He pointed out that every 1% increase in AT&C loss results in losses exceeding Rs 100 billion and called for leveraging renewable energy, adopting advanced technologies like AI for demand forecasting, and expediting projects under the Revamped Distribution Sector Scheme (RDSS). Fadnavis praised the Centre’s initiatives and stressed the importance of expanding renewable energy with storage solutions to meet future energy demands. He showcased Maharashtra’s efforts under the Mukhyamantri Saur Krishi Vahini Yojana, which provides daytime power to farmers, reducing costs and subsidy burdens. He also sought support from the Centre for faster release of Gross Budgetary Support under RDSS and called for lower interest rates on loans and regulatory relaxations. Gujarat, invited as a special participant, shared best practices that made its DISCOMs profitable. Member states, including Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Rajasthan, presented their reform efforts and suggestions for improving the financial health of DISCOMs. The PRAYAS group also proposed reforms for a financially viable distribution sector. The GoM reaffirmed its commitment to enhancing the financial viability of DISCOMs and agreed to hold its third meeting in Uttar Pradesh in March. (PIB)

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