The Government of India, the State of Andhra Pradesh and the DISCOMs of Andhra Pradesh (APSPDCL and APEPDCL) signed a Memorandum of Understanding (MOU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” in Vijyawada (AP) for financial turnaround of the DISCOMs.
The MoU for operational & Financial turnaround of Discoms was signed by Dr A.K. Verma, JS (Distribution), Ministry of Power, Shri Ajay Jain Principal Secretary (Energy), AP , Shri H Y Dora CMD, Southern Power Distribution Company of A.P. Ltd (APSPDCL) and Shri Muthyala Raju, CMD, Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) in presence of Chief Minister of Andhra Pradesh Shri N . Chandrababu Naidu and Shri Piyush Goyal, Union Minister of State (IC) for Power, Coal and New & Renewable Energy .
Under UDAY, twelve states have signed MoU till date. Today, Andhra Pradesh has signed the MoU as the thirteenth State to be covered under UDAY. The combined DISCOM debt (including CPSU dues) that would be restructured in respect of these states is around Rs.2.16 lac crore, which is half of the total outstanding DISCOM debt as on 30th September, 2015.
Speaking on the occasion Union Minister of State (IC) for Power, Coal and New & Renewable Energy, Shri Piyush Goyal said Andhra Pradesh is one of the top three States for achieving 100 percent electrification the State. The other two states are Gujarat and Punjab the Minister said.. While complementing the State for the milestone, Shri Goyal said that Andhra Pradesh is one among the few States by connecting digital technology with electricity by introducing Smart Meter Scheme,
Chief Minister of Andhra Pradesh Shri Nara Chandrababu Naidu said the State will carry forward the reforms in electricity to achieve energy efficiency. He said the Government is committed to uninterrupted and quality power supply.
The Union Minister also formally launched Andhra Pradesh State Energy Efficiency Development Corporation (APSEEDCO) an Energy Efficiency consultancy in collaboration with GoI, unit started by the AP government.
Today the Government of Andhra Pradesh has taken a positive step towards supporting its DISCOMs by signing the MOU under UDAY for further improving the financial and operational efficiency of the already efficient DISCOMs. The State of Andhra Pradesh has committed to take over DISCOMs’ debt of Rs.11000 cr. during the current year, which would reduce the interest burden of the State by Rs.330 crore per annum.
Through compulsory Distribution Transformer metering, consumer indexing & 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. The reduction in AT&C losses of APEPDCL to 5.44% and that of APSPDCL to 10.89% and transmission losses of the State to 3.50% is likely to bring additional revenue of around Rs.214 crore during the period of turnaround.
While efforts will be made by the State Government and the DISCOMs 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 DISCOMs and the State Government for improving Power infrastructure in the State and for further lowering the cost of power. The Central schemes such as DDUGJY, IPDS, Power Sector Development Fund or such other schemes of MOP and MNRE are already providing funds for improving Power Infrastructure in the State and additional/priority funding would be considered under these schemes, if the State/DISCOMs 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.2199 crore 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 PAT (Perform, Achieve, Trade) would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the State of Andhra Pradesh. The gain is expected to be around Rs.882 crore.
Improvement in operation efficiency would enable the DISCOMs to borrow at cheaper rates in future, for their infrastructure development and improvement of existing infrastructure.
An overall net benefit of approximately Rs.4400 crore would accrue to the State by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.
The ultimate benefit of signing the MOU would go to the people of Andhra Pradesh. Reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers. Further, financially and operationally healthy DISCOMs would be in a position to supply more power. Higher demand for power would mean higher 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.