Goyal urges more efficiency by states’ power departments

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Vadodara, Oct 7 (IANS) Declaring that it doesn’t aim to give out dole to states, the central government on Friday exhorted state power departments to become more efficient and transparent to achieve the goal of supplying affordable electricity.

“We are not here to give out dole to states… rather the Union Government encourages states to become efficient in their functioning, more transparent and self-reforming so as to work for the wider interests of the society and achieve the goal of 24×7 Affordable Power for All,” Union Power Minister Piyush Goyal said inaugurating a conference here of Power Ministers of states and union territories (UTs).

“I am greatly satisfied with the encouraging response from the states,” Goyal said in this regard, also drawing attention to the response of the states to the Centre’s UDAY debt restructuring scheme for state distribution companies (discoms).

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Issues such as implementation of Ujwal Discom Assurance Yojana (UDAY), National Electricity Plan, open access, compliance of renewable purchase obligation (RPO) by the states, policy interventions for hydro development, and import substitution of coal, among others, are expected to be discussed at the two-day conference here.

UDAY envisages taking over 75 per cent of discoms’ cumulative debt. States would issue loans against the debt at prevailing market rates. The balance 25 per cent would be issued as sovereign backed bonds by discoms.

The scheme also envisages access to cheaper coal, modernising transformers to cut distribution losses, as well as a provision to revise tariffs, which has been criticised by the AIADMK government in Tamil Nadu. Tamil Nadu stands out among states which have not yet opted for UDAY.

Twenty Indian states and one UT have given in-principle approval for UDAY and 16 have already signed up for the scheme.

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According to US rating agency Fitch, the committed Indian states and UTs accounted for almost 77 per cent of the total net cash losses reported by discoms in fiscal 2014, and around 58 per cent of the total debt outstanding at end-September, 2015.

The current low capacity utilisation of power plants is driven primarily by stressed discoms, which are unable to buy electricity because of weak financial positions, Fitch said in its report last month.

Giving the motto of “Together We Can”, Goyal elaborated on the elementary challenges which affect the efficient functioning of the renewable energy sector at the state level.

“These include state governments not signing Power Purchase Agreements (PPAs) with the power suppliers, not paying for purchased power in time, not implementing the ‘Must Run Status’ for the power plants and non-compliance of renewable purchase obligation (RPO) strictly by all the states,” an official statement cited Goyal as saying.

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“The Minister observed that without addressing these basic issues at the earliest, the country’s power scene would not be able to meet the high standards set by this government,” it added.

The conference is being organised as part of the Switch Global Expo here organised by the Gujarat government.

In the area of renewable energy, state-wise review will be taken on issues regarding solar power, wind power as well as the compliance of Renewable Purchase Obligations and Renewable Energy Certificates, the statement said.

In the coal sector, deliberations will focus upon issues like import substitution of coal, and flexibility in utilisation of coal, among other outstanding issues of coal companies, it added.



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