Nagaland, and three Union territories, are the latest entrants to the Ujwal Discom Assurance Yojana (UDAY), the Central scheme for restructuring government-owned power distribution utilities. The three UTs are Andaman & Nicobar Islands, Dadra & Nagar Haveli and Daman & Diu.
All the four latest participants have enrolled for operational improvement, and shall not undergo financial restructuring. As a corollary, there will be no issuance of government-backed bonds for these states. Nagaland stands to make an overall net benefit of Rs.551 crore, a government release said.
All the participants, by virtue of their membership in UDAY, will benefit by way of cheaper funds for capex, reduction in AT&C and transmission losses, interventions in energy efficiency, etc. during the period of turnaround.
UDAY completed two years on November 5, 2017, and the total participation so far stands at 27 states and four Union territories.
The MoU paves way for improving operational efficiency of the power distribution utility or electricity department of the state/UT. Through compulsory distribution transformer metering, consumer indexing and GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, feeder audit etc. AT&C losses and transmission losses would be brought down, besides eliminating the gap between cost of supply of power and realisation.
While efforts will be made by states to improve their operational efficiency, and thereby reduce the cost of supply of power, the Central government would also provide incentives to the states for improving power infrastructure and for further lowering the cost of power.
Demand-side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans and air-conditioners, and efficient industrial equipment through PAT (Perform, Achieve, Trade) would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the state/UTs. Further, with improved efficiency, they would be in a better position to fund their capex at cheaper rates for power infrastructure development in the participating states.
Ultimate Objective
The ultimate benefit of UDAY-participating states and UTs would go to their people. Reduced levels of AT&C losses would mean lesser cost per unit of electricity to consumers. Further, an operationally healthy power distribution utility would be in a position to supply more power. The scheme would also allow speedy availability of cheaper power to households in states that are still without electricity. Availability of cheaper and round the clock power would boost the economy, promote industries, thereby improving employment opportunities for the people of the participating states.
