| Work Detail |
A Group of Ministers (GoM) convened its third meeting, chaired by Union Minister of State for Power and New & Renewable Energy, Shri Shripad Yesso Naik, in Lucknow, to address the financial challenges faced by electricity distribution utilities (DISCOMs) across India. The meeting saw participation from several state energy ministers, including Shri A.K. Sharma from Uttar Pradesh, Shri Gottipati Ravi Kumar from Andhra Pradesh, Shri Pradyuman Singh Tomar from Madhya Pradesh, Smt. Meghana Sakore Bordikar from Maharashtra, and Shri Somendra Tomar, also from Uttar Pradesh. Senior officials from the central and state governments, as well as representatives from state power utilities, the Power Finance Corporation (PFC) Ltd, and REC Ltd, were also in attendance. Shri Shripad Yesso Naik initiated the discussions by welcoming the state energy ministers and expressing gratitude to Uttar Pradesh for hosting the meeting. He recapped the key discussions from the previous two GoM meetings, emphasizing the necessity for collaborative efforts among member states to improve the power distribution sector. He stressed the importance of devising a mechanism for financial restructuring of DISCOM liabilities, reducing the interest burden on utilities, developing energy storage solutions, and facilitating daytime power supply for agriculture to lower power purchase costs and subsidies. The Minister of State further highlighted the need for implementing artificial intelligence (AI) and digital innovations to enhance the financial viability of the power sector. He advocated for cost-reflective tariffs to ensure the financial sustainability of utilities and suggested the implementation of a scheme similar to the UDAY initiative. Uttar Pradesh Energy Minister, Shri A.K. Sharma, expressed his appreciation for hosting the GoM meeting in Lucknow and outlined Uttar Pradesh’s achievements in the power sector, including the adoption of renewable energy (RE) technologies. He acknowledged the positive impact of the central government’s measures on strengthening the country’s distribution sector. He emphasized the critical role of the rapid expansion of renewable energy sources, coupled with energy storage solutions, to address future energy transition challenges and increasing power demand. He also mentioned the importance of the Government of India supporting human resources development in the sector. The Joint Secretary (Distribution), Ministry of Power, presented the key intervention areas identified in the previous GoM meetings and proposed measures for central and state governments and regulatory commissions to improve DISCOM viability. Tata Power Distribution, Odisha, was invited to share its best practices and its successful journey towards achieving profitability as a DISCOM. Member states actively engaged in discussions, providing overviews of their respective DISCOMs and offering valuable suggestions for improving their financial health. Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Maharashtra, and Tamil Nadu delivered detailed presentations on the subject. The meeting extensively covered the development of an action plan to reduce outstanding debts and losses of distribution utilities and strategies to achieve profitability. Participants emphasized the need for a review of regulatory performance in tariff determination. Support from the central government for state-led privatization initiatives was suggested. Discussions also focused on the need for regulators to adapt to evolving sector dynamics, including increased RE integration, capacity-building requirements, and O&M costs, during tariff finalization. The meeting addressed concerns about delays in payments of government department dues and subsidies, which force DISCOMs to rely on working capital loans. Participants noted delays in passing on Fuel and Power Purchase Cost Adjustments in tariffs, creating a need for working capital not adequately considered in utilities’ Annual Revenue Requirements. To mitigate future tariff volatility, a proposal to link tariffs to annual inflation-linked hikes was put forth. The Group of Ministers reaffirmed its commitment to taking necessary actions to enhance the financial viability of DISCOMs. The Union Minister of State stressed the importance of states demonstrating strong political will and determination to improve the power sector’s viability. He urged member states to act upon the ideas generated during the meeting. The GoM recommended inviting the All India DISCOM Association (AIDA) to the next meeting to gather their insights and suggestions. |
