Revamped Distribution Sector Scheme

Revamped Distribution Sector Scheme

Part of: GS Prelims and GS -III – Discoms

In news The Union Cabinet has approved a Reforms-based and Results-linked, Revamped Distribution Sector Scheme recently.

About Revamped Distribution Sector Scheme

• The Scheme seeks to improve the operational efficiencies and financial sustainability of all DISCOMs/ Power Departments excluding Private Sector DISCOMs.
• It provides conditional financial assistance to DISCOMs for strengthening of supply infrastructure. 
• The assistance will be  based on meeting pre-qualifying criteria as well as upon achievement of basic minimum benchmarks by the DISCOM evaluated on the basis of an agreed evaluation framework tied to financial improvements. 
• Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach.
• Duration of the scheme: The Scheme would be available till the year 2025-26. 
• Nodal agencies: REC Limited (formerly Rural Electrification Corporation Limited) and Power Finance Corporation Ltd.have been nominated as nodal agencies for facilitating implementation of the Scheme.

• Scheme Objectives

• • Reduction of AT&C losses to pan-India levels of 12-15% by 2024-25.
  • Reduction of ACS-ARR gap to zero by 2024-25.
  • Developing Institutional Capabilities for Modern DISCOMs
  • Improvement in the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient Distribution Sector.

Other key Features of the scheme

• The Scheme provides for annual appraisal of the DISCOM performance against predefined and agreed upon performance trajectories including AT&C losses, ACS-ARR gaps, infrastructure upgrade performance, consumer services, hours of supply, corporate governance, etc. 
• DISCOMs have to score a minimum of 60% of marks and clear a minimum bar in respect to certain parameters to be eligible for funding against the Scheme in that year.
• The Scheme has a major focus on improving electricity supply for the farmers and for providing daytime electricity to them through solarization of agricultural feeders. 
• Under the scheme, works of separation of 10,000 agriculture feeders would be taken up.
• This Scheme converges with the Pradhan Mantri Kisan Urja Suraksha Evem Utthan Mahabhiyan (PM-KUSUM) Scheme, which aims to solarize all feeders, and provide avenues for additional income to farmers.
• Scheme is to enable consumer empowerment by way of prepaid Smart metering to be implemented in Public-Private-Partnership (PPP) mode.
• It is proposed to install approximately 10 crore prepaid Smart Meters by December, 2023 in the first phase. 

News Source: PIB