The Union Minister for Power and New and Renewable Energy announced that the implementation of the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 has significantly improved the financial health of power distribution companies (discoms).
Under these rules, the payment dues of discoms to power generation companies have dropped remarkably – from Rs 1,399 billion in June 2022 to Rs 494.52 billion in January 2024, after timely payment of 18 monthly installments. The discoms are also promptly paying current bills to avoid restrictions on open access under the rules.
The minister said the rules have not only ensured outstanding dues are paid down, but also enforced financial discipline in discoms by mandating timely payments. This will facilitate fresh investment needed to sustain 24×7 power for consumers.
The government has taken several steps to instill financial viability and sustainability in the power sector, particularly distribution. These include rules for timely subsidy payments by states, updated tariffs, prompt energy accounting and audits, ensuring generators are paid on time, and linking state loans to discom loss reduction plans and performance.
Under various central schemes, infrastructure upgrades worth Rs 1,850 billion have been undertaken, like new substations, transformer installations, feeder separation, and HT/LT line addition/upgradation.
In addition, the Revamped Distribution Sector Scheme with Rs 3,000 billion outlay aims to improve supply quality and sustainability through infrastructure enhancements like 1.5 million circuit km of new/upgraded HT/LT lines, 478,000 new/upgraded transformers, 1,110 new/upgraded substations, and nationwide smart metering.
The government has also mandated that loss-making discoms cannot avail of central power sector schemes without implementing loss reduction measures.
