The power ministry has recommended all central ministries and departments switch over to pre-paid smart electricity meters on a priority basis. The action comes as a part of the country's push to use electricity smart meters to minimize distribution losses.
The ministries have also been instructed to issue all enabling orders in this regard.
As per an official statement, "the Ministry of Power has issued an advisory to all central ministries of the government directing organisations under their administrative control to ensure switchover to prepaid smart metres on a priority basis."
The installation of pre-paid smart metres will allow all central ministries and departments to make advance payments without requiring any bank guarantees, while still guaranteeing proper accounting arrangements.
This follows as discoms have long been the weakest link in the electricity value chain, burdened by low collections, rising power purchase costs, inadequate pricing hikes and subsidy disbursement, and escalating government department dues.
A statement from the Union power ministry stated, “Apart from the operational inefficiencies that cause financial losses, mounting electricity dues of the government departments, including Central and state governments; urban and rural local bodies; and government boards and corporations due to delayed and inadequate payments for electricity usage also causes cash flow distress in discoms.”
Also Read: Checkout the list of single use plastic products to be prohibited from July 1, 2022
The statement further said, “The interest burden on the additional working capital availed by discoms to tide over the shortfalls further creates inflationary pressure on their costs, thereby placing further stress on their viability. Estimates obtained from the States suggest the outstanding Government department dues to be ₹48,664 crores at the end of FY2020-21, a value that is a colossal 9% of the annual power sector turnover."
As per the official statement, prepaid smart electricity meters in all government departments will go a long way toward ensuring the government's commitment to getting DISCOMs back on track to financial sustainability and energy efficiency. Besides, it would serve as a model for states to follow in defining similar mechanisms that support the prepayment of electricity dues by their own departments.
The Government is dedicated to providing all consumers with an uninterrupted, stable, and high-quality power supply, which needs an operationally efficient and financially sustainable power sector.
The Revamped Distribution Sector Scheme, a reforms-based and results-linked scheme has been approved by the GoI that aims to improve the operational efficiency and financial sustainability of current DISCOMs.