The government has put in place measures for meeting the country’s power demand, which in FY23 grew at over 10 per cent Y-o-Y, Power and New & Renewable Energy Minister RK Singh said. In an interview to businessline, Singh emphasised that his confidence comes from the reforms unleashed by the government which have strengthened the financial and operational capabilities of the sector. Excerpts:
How confident are you about meeting the country’s power demand?
We are prepared. In FY24, power demand is likely to hit 229-230 gigawatts (GW). Though summers have been mild, barring a few days and not touching 40 degrees, I expect it to go up and demand to be in range of 225 GW. We have put in place measures to deal with higher demand, which are working. Here, I want to congratulate the entire Ministry for its efforts in meeting the demand, which has broken all past records. It’s the government’s duty to provide affordable and assured power supply.
Could you share a few of these measures?
First, we have coal reserves at around 32 million tonnes and have also tied up gas-based capacity of over 5,000 megawatts (MW). Another is that plant maintenance schedules should not take place during peak season and will take place post the peak season. Today, around 1,200 MW capacity is under maintenance, but it will come on-stream in April. Another is that any plant whose PPA gets over, we will put it in a common pool.
The tariff will be a single tariff for the whole country. It is fair to everybody because the plants that come into the pool have different energy charge rate (ECR). Around 11,000-12,000 MW of capacity has come in the pool. These capacities are in process of coming online.
What is the progress on your efforts to ensure that Discoms follow financial discipline?
We made energy accounting compulsory and laid norms for corporate governance. Now, we analyse whether states are following the prescribed trajectory. If you don’t follow the steps, you will not get loans from PFC and REC nor get assistance from any central scheme, or the extra 0.5 per cent borrowing space. These steps are that tariffs have to be up to date and cost reflective. Second, no regulatory assets. Third, subsidy payments are up-to-date. Payments now have a standard operating procedure, where the billing is on quarterly basis. Billing will be on basis of units consumed by the subsidised category and not lump sum.
States will have to declare subsidies on a per unit basis and Discom while submitting bills will specify electricity provided to people. Now, we will come out with rules that say that subsidy has to be paid to the Discom under Section 65 of Electricity Act. Subsidy cannot be adjusted against any dues and is paid out of the taxpayers’ funds. It is the right of the people. Subsidy can be given either to the Discom or the beneficiary only.
What are your thoughts on the progress of Late Payment Surcharge (LPS) rules?
The States have paid up legacy dues of around ₹56,000 crore so far and legacy dues of around ₹86,952 crore are left. Current dues are up to date. These rules have helped instill financial discipline among Discoms. My Ministry is strictly monitoring the equated monthly installments and is ensuring all norms are followed at all cost.