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Distribution utilities owe Rs 1.56 lakh crore to power producers: Power Minister RK Singh

The minister, in a written reply to the Lok Sabha said the condition of most of the state government-owned distribution companies is a matter of grave concern.

Published: 17th December 2021 03:55 AM  |   Last Updated: 17th December 2021 10:46 AM   |  A+A-

Union Minister of State for Power and New and Renewable Energy RK Singh

MoS Power and New and Renewable Energy RK Singh (File Photo| PTI)

By Express News Service

NEW DELHI: Pressing for immediate reforms in the power sector, Power Minister RK Singh on Thursday informed that total outstanding dues owed by power distribution utilities or discoms to generation firms (gencos) are estimated to be more than Rs 1.56 lakh crore.

The minister, in a written reply to the Lok Sabha said the condition of most of the state government-owned distribution companies is a matter of grave concern.

"Discoms have not been able to pay the generation companies for the power procured, and the outstanding payments to generation companies are estimated to be in excess of Rs 1,56,000 crore. The outstanding dues to renewable generators are around 11 months of revenues," said Singh.

The minister also said that the reforms have been deliberated upon in consultation with the states and all stakeholders. However, no final decisions have been arrived at so far. "Their (discom) AT&C (aggregate technical and commercial) losses at the end of 2019-20 range from an average of 21 per cent to a maximum of 60.16 per cent," the minister told the house.

"The gap between average cost of supply (ACS) and average revenue realised (ARR) excluding regulatory assets and Ujwal discoms assurance yojana (UDAY) grants averages 60 paise per unit in 2019-20 and the accumulated losses of all discoms by 2019-20 have risen to Rs 5,07,416 crore," he added. To introduce the reform in the sector, the government has proposed the Electricity Amendment Bill, 2021.

However, the bill is yet to take the Union Cabinet's approval. The Bill proposes to de-license the power distribution business, which would eventually make way for multiple (electricity supply) service providers in an area.

The government claims, similar to delicensing of electricity generation, the delicensing of distribution business will enable multiple distribution companies to operate in the same area, leading to competition and choice to the consumers.

Registration with the appropriate commission will be required. The existing distribution companies shall continue as they are. No change proposed in the structure of existing distribution companies.

Reforms underway

  • Government has proposed the Electricity Amendment Bill, 2021, which is yet to get Cabinet nod

  • The Bill proposes to de-license the power distribution business, which would eventually make way for multiple service providers in an area



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