The union territory of Puducherry has signed a memorandum of understanding with the centre under Ujwal DISCOM Assurance Yojana for operational turnaround of the union territory's electricity department.
"An overall net benefit of approximately Rs 378 crore would accrue to Puducherry by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses and interventions in energy efficiency during turnaround," the power ministry said in a statement.
With this a total of 16 states and union territories have joined the scheme with the combined debt of around Rs 2.51 lakh crore that would be restructured till 30th September, 2015.
UDAY will help Puducherry improve its electricity department's operational efficiency. It will be achieved through compulsory metering of distribution transformers, consumer indexing and geographical image satellite mapping for losses, modernisation and upgradation of transformers, meters, introduction of smart metering for high-end consumers and feeder audit.
Aggregate technical and commercial (AT&C) losses and transmission losses would be brought down, besides eliminating the gap between cost of power supply and realisation to 12% and 0.95% respectively. Reduction is losses are likely to bring additional revenue of around Rs 165 crore during the period of turnaround.
While efforts will be made by the electricity department of Puducherry to improve operational efficiency, and thereby reduce cost of power supply, the centre will also provide incentives for improving power infrastructure for further lowering cost of power.
Puducherry shall also be supported through additional coal at notified prices, 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 further reduce cost of power. Puducherry is expected to gain around Rs 135 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 would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in Puducherry. The gain is expected to be around Rs 72 crore.
Further, with improved efficiency, the electricity department would be in a better position to borrow funds at cheaper rates for power infrastructure development and improvement.
Reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers. Further, an operationally healthy electricity department would be in a position to supply more power. The scheme would allow speedy availability of power to around 7948 households in union territory that are still without power.
UDAY is helping Distribution company as a whole to reduce there debt and improve efficiency. The main reason of increasing loss by discom is inadequate metering,improper collection efficiency,high transmission losses and the list goes on. Thus the effect of UDAY will be seen after 3-4 years in Indian Power Sector. Let's hope for best such that it can help distribution companies to grow at faster pace.