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Condition of most state govt-owned discoms matter of grave concern: RK Singh

RK Singh told the Rajya Sabha that the outstanding dues owed by discoms to power generating companies (gencos) is estimated to be over Rs 1.56 lakh crore
Condition of most state govt-owned discoms matter of grave concern: RK Singh
Condition of most state govt-owned discoms matter of grave concern: RK Singh
  • Discoms’ outstanding dues to renewable generators are around 11 months of revenues, said Singh
  • Reforms have been deliberated upon with states and other stakeholders to improve the condition of discoms, said the minister

New Delhi: While stating that the condition of most state government-owned power distribution companies (discoms) is a matter of grave concern, Minister for Power RK Singh told the Rajya Sabha on Tuesday that the outstanding dues owed by discoms to power generating companies (gencos) is estimated to be over Rs 1.56 lakh crore. In a written response to a question raised in the Upper House of Parliament, the minister said, “DISCOMs have not been able to pay the Generation Companies for the power procured, and the outstanding payments to generation companies is estimated to be in excess of Rs 1,56,000 crore.”

Pointing out that the outstanding dues to renewable generators are around 11 months of revenues, Singh said that reforms have been deliberated upon with states and other stakeholders to improve the condition of discoms. In response to a question on whether the government is mulling amendments to the Electricity Act, 2003, the Power Minister said, “No final decisions have been arrived at so far.”

Discom losses have risen to over Rs 5 lakh crore

The minister told the House that discoms’ AT&C losses at the end of 2019-20 ranged from an average of 21 percent to a maximum of 60.16 percent. “The gap between Average Cost of Supply (ACS) and Average Revenue Realised (ARR), excluding Regulatory Assets and Ujwal DISCOM Assurance Yojana (UDAY) grants, averages 60 paise per unit in 2019-20. And the accumulated losses of all DISCOMs in the country by 2019-20 have risen to Rs 5,07,416 crore,” said the minister.

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Backdrop

In order to alleviate the financial stress in the power distribution sector, the Central government has approved a revamped distribution sector scheme — a reforms-based and results-linked scheme with an outlay of Rs 3,03,758 crore over a period of five years from FY22 to FY26 with the objective to improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector. The disbursement of loans to discoms under the scheme are tied to improvement in performance parameters. The scheme is being implemented by Power Finance Corporation (PFC) and REC Limited.

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