Union Minister of State for Power and New & Renewable Energy, Shripad Yesso Naik, highlighted the need for implementing AI and digital innovations and the need for ensuring cost-reflective tariffs for financial viability of the power sector.

He added that implementing these measures shall help utilities improve the financial sustainability. He also emphasised the need for a scheme similar to UDAY.

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Naik’s remarks came while chairing the third meeting of the Group of Ministers constituted for addressing issues related to viability of electricity distribution utilities in Lucknow.

The MoS also highlighted the need for designing a mechanism for financial restructuring of liabilities of distribution utilities, lowering interest burden on utilities, development of storage solutions, facilitating daytime power supply for agriculture to lower the overall power purchase costs and reduce subsidy burdens.

He emphasised on the need for States to demonstrate greater political will and determination to make the power sector viable and urged the member States to work upon the ideas that have emerged during the meeting.

Uttar Pradesh Energy Minister A K Sharma, at the meeting highlighted the achievements of Uttar Pradesh in the power sector including adoption of RE technologies.

He commended that the measures taken by the Government of India will have a far reaching impact on making the country’s distribution sector stronger and healthier.

Sharma emphasised on the need for expeditious growth of renewable sources of energy coupled with energy storage solutions so as to meet the future challenges of energy transition and growing power demand.

Further, the Joint Secretary (Distribution), Ministry of Power, GoI made a presentation highlighting key areas of intervention identified during first two meetings of the GoM and proposed measures to be taken by the stakeholders (Central Govt, State Govts. and Regulatory Commissions) to address the viability concern for deliberation.

TATA power distribution, Odisha, as a special invitee, shared the best practices adopted and their journey toward making their DISCOMs profitable.

At the meeting, emphasis was placed on the need for review of regulators’ performance for determining tariffs.

The members also discussed the need for regulators to adapt to the latest developments in the sector including the current levels of RE integration, the requirements of capacity building and O&M costs, while finalising the tariff, was also discussed.

It was discussed that delays in payment of Government department dues and subsidies are forcing DISCOMs to resort to working capital loans, which are not being passed on in tariff.

To avoid future tariff shocks, it was suggested to link tariffs to annual inflation-linked tariff hike.

It was recommended to invite All India DISCOM Association (AIDA) to the next GoM meeting for their suggestions. The members unanimously decided to have the 4th meeting of GoM in Andhra Pradesh in the month of April.