Home Featured Maharashtra becomes 17th State to join UDAY: an overall net benefit of Rs. 9725 crores to accrue to the State
Maharashtra becomes 17th State to join UDAY: an overall net benefit of Rs. 9725 crores to accrue to the State

Maharashtra becomes 17th State to join UDAY: an overall net benefit of Rs. 9725 crores to accrue to the State

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Government of India signed a Memorandum of Understanding (MOU) with Government of Maharashtra and Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) under the Ujwal DISCOM Assurance Yojana (UDAY) at the two-day State Power Ministers Conference in Vadodara today.Under UDAY, sixteen states/UT have already signed the MoU till date, Maharashtra being the seventeenth. The combined DISCOM debt, including Central PSU dues, that would be restructured in respect of these states is around Rs.2.57 lakh crores, which is around 68% of the total outstanding DISCOM debt as on 30th September, 2015.

An overall net benefit of approximately Rs.9725 crores would accrue to Maharashtra by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.Under UDAY, Maharashtra Government has committed to take over 75% of DISCOM’s non-capex debt of around Rs.6600 crores during the current year. Balance 25% of such debt remaining with the DISCOM would be converted into Bonds or repriced at cheaper rates. This would reduce the interest burden of the State/DISCOM by Rs.595 crores.

Through compulsory Distribution Transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers & meters, smart metering of high-end consumers, feeder audit, among other steps, AT&C losses and transmission losses would be brought down, besides eliminating the gap between cost of supply of power and realisation. The reduction in AT&C losses of MSEDCL to 14.39 % and transmission losses of the State to 3.75% is likely to bring additional revenue of around Rs.2200 crores during the period of turnaround.

While efforts will be made by the State Government and the DISCOM to improve the operational efficiency of the DISCOM, and thereby reduce the cost of supply of power, the Central government would also provide incentives to the DISCOM and the State Government for improving Power infrastructure in the State and for further lowering the cost of power.

The Central schemes such as Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Power Sector Development Fund or such other schemes of Ministries of Power and New & Renewable Energy are already providing funds for improving Power Infrastructure in the State and additional/priority funding would be considered under these schemes, if the State/DISCOM meet the operational milestones outlined in the scheme.

The State shall also be supported through additional coal at notified prices and in case of availability, through higher capacity utilization, low cost power from NTPC and other CPSUs. Other benefits such as coal swapping, coal rationalization, correction in coal grade slippage, availability of 100% washed coal would help the state to further reduce the cost of Power. The State would gain around Rs.4500 crores due to these coal reforms.

Demand Side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans & air-conditioners and efficient industrial equipment through Perform, Achieve, Trade (PAT) would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the State. The gain is expected to be around Rs.2370 crores.

Improvement in operation efficiency would enable the DISCOM to borrow at cheaper rates in future, for their infrastructure development and improvement of existing infrastructure. The gain is expected to be around Rs.60 crores.

The ultimate benefit of signing the MOU would go to the people of Maharashtra. Reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers. Further, financially and operationally healthy DISCOM would be in a position to supply more power. Higher demand for power would mean higher Plant Load Factor (PLF) of generating units and therefore, lesser cost per unit of electricity which would again mean lesser cost per unit of electricity to the consumers.

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Anand Gupta Editor - EQ Int'l Media Network

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