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RDSS: 39 discoms have readied draft action plans to turn around performance, says govt

A total of 39 beneficiary power distribution companies (discoms) out of 55 have submitted draft action plans to turn around their financial performance under the Revamped Distribution Sector Scheme (RDSS)
Revamped Distribution Sector Scheme: Meghalaya, Assam frontrunners in planning operational, financial reforms
Revamped Distribution Sector Scheme: Meghalaya, Assam frontrunners in planning operational, financial reforms

New Delhi: A total of 39 beneficiary power distribution companies (discoms) out of 55 have submitted draft action plans to turn around their financial performance under the Revamped Distribution Sector Scheme (RDSS), the Ministry of Power has said. "39 out of 55 beneficiaries Discoms (Nodal Agencies REC and PFC) have already submitted their draft proposals and are in active discussions with Nodal Agencies for their finalization, while the balance Discoms are also expected to send their proposals shortly," said the ministry in an official statement.

The Power Ministry also said that two of the North-Eastern states have shown exemplary initiative in plan formulation for turning around their power sector. "State Governments of Meghalaya and Assam have become the frontrunners in planning their operational and financial reforms as well as the underlying works to accomplish the same under Revamped Distribution Sector Scheme. Accordingly, their state-level Distribution Reforms Committee (DRC) and State Cabinet have approved the proposals, including action plan and DPR, for consideration under the scheme," said the ministry.

Revamped Distribution Sector Scheme (RDSS)

The Ministry of Power had launched the reforms-based and results-linked, revamped Distribution Sector Scheme (RDSS), with the objective to improve the operational efficiencies and financial sustainability of the state-owned DISCOMs/ Power Departments by providing financial assistance to DISCOMs for modernisation and strengthening of distribution infrastructure, aiming at the improvement of the reliability and quality of supply to end consumers. REC Limited is the Nodal Agency for the scheme.

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The action plans from the states include multiple reform measures aimed towards loss reduction, implementation of smart prepaid metering of majority of their consumer base, 100% feeder level energy accounting by FY23, reconductoring of old/frayed conductors, conversion to LT ABC, bifurcation of feeders, segregation of agriculture feeders, and up-gradation of billing and other IT/OT systems, in addition to works towards improving quality and reliability of supply. Under these plans, the State Governments have also committed to ensuring the financial viability of the Discoms, such as liquidation of outstanding subsidy dues and Govt. department dues, implementation of tariff reforms, measures to enhance consumer services etc. These proposals would now be put forward to the Monitoring Committee set up by the Ministry of Power for approval.

It is noteworthy that RDSS has an outlay of Rs 3,03,758 crore with estimated budgetary support from the Central government of Rs 97,631 crore, which would be available till FY 2025-26. The assistance is reforms-linked and will be based on meeting pre-qualifying criteria as well as upon achievement of performance benchmarks by DISCOMs evaluated based on an agreed and customised evaluation framework tied to financial and operational improvements. The unique feature of the scheme is that its implementation is based on the action plan worked out for each state to address state-specific issues, rather than a “one-size-fits-all” approach.

What are discoms required to do under RDSS?

Key interventions envisioned under this programme include providing support to DISCOMs to undertake activities for ensuring 100 percent system metering, implementing Prepaid Smart Metering, Energy Accounting, and implementing infrastructure works for Loss Reduction, as well as for Modernization and System Augmentation aimed at improving the quality and reliability of power supply. In addition, the segregation of feeders dedicated only for the supply of power for agricultural purposes, which are proposed to be solarized under the KUSUM scheme, will be sanctioned on priority under the scheme. Along with their proposals, DISCOMs will also need to submit an action plan for strengthening their distribution system and improving performance by way of various reform measures targeting improvement in operational efficiency, financial viability and quality and reliability of power supply.

Given the current state of operational and financial losses of discoms in the country and to provide a much-needed fillip to the power sector as well as the overall economy in the pandemic affected year, multiple meetings and workshops with discoms have been conducted to assess their level of preparedness for taking benefits under the scheme by the Ministry of Power and the Nodal Agencies, chaired by the Minister of Power RK Singh.

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