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DISCOM DEBT TO RETURN TO PRE-UDAY LEVELS, INDUSTRY - Coggle Diagram
DISCOM DEBT TO RETURN TO PRE-UDAY LEVELS
Context
As per a recent report of the rating agency CRISIL, the total debt of state-owned DISCOMS is set to increase to pre Uday levels of Rs 2.6 trillion by the end of this fiscal year 2019-2020.
Details
Energy Efficiency
Services Limited (EESL)
• It is an energy service company (ESCO) of the Government of India and is the world’s largest public ESCO.
• It is 100% government owned, a joint venture of state-owned NTPC Limited, Power Finance Corporation, Rural Electrification Corporation and POWERGRID.
• EESL was formed under India’s Ministry of Power to facilitate energy efficiency projects
Aggregate Technical
and Commercial
(AT&C) Losses
It has two components
Technical Loss: It is due to the flow of power in transmission and distribution system.
Commercial Loss: It is due to theft of electricity, deficiencies in metering, etc.
About UDAY Yojana
The Ujwal Discom Assurance Yojana (UDAY) was launched by the Ministry of Power in November 2015 to help turn around the poor financial situation of state DISCOMs.
Critical Components
• Takeover of 75% of discom debt by state governments
• Reduction in AT&C losses
• Timely tariff revisions and elimination of the gap between the Average Cost of Supply (ACS) and Average Revenue Realised (ARR) by the financial year 2019.
States to take over future losses of DISCOMs as per trajectory in a graded manner.
[0% of loss of 14-15 & 15-16; 5% of 16-17; 10% of 17-18; 25% of 18-19 & 50% of 2019-20]
• In 2015, Ministry of Power, Government of India launched the Ujwal DISCOM Assurance Yojana (UDAY). It was designed to turn around the precarious financial position of state power distribution companies (DISCOMs).
• DISCOMs are responsible for buying electricity from the generation companies and selling them to consumers.
• The DISCOMs losses, which had progressively reduced in the first couple of years (since the inception of UDAY), have rebounded in 2019 to nearly double the losses recorded the previous year.
• According to PRAAPTI (Payment Ratification and Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal, the discoms’ total outstanding dues to power gencos (power generating companies) rose 48% in October 2019.
• Discoms have also missed the year 2019 UDAY target to bring down their Aggregate Technical and Commercial (AT&C) losses to 15%.
INDUSTRY