Electricity reforms: Errant discoms to lose PFC funding, prepaid meters to be the norm

Stating that a lack of disincentives for non-performance was one of the drawbacks of the UDAY scheme for electricity distribution entities that ran between November 2015 and March 2019, Union power and renewable energy minister RK Singh said a new scheme in the works would lay a big emphasis on prudence. He said it would also include depriving discoms, failing to traverse a glide path for AT&C loss reduction to be agreed upon among the Centre and states, of their principal source of loan finance, namely Centre-run PFC-REC.

He further said a ‘bouquet of steps’ for loss reduction would be suggested to the discoms for them to stick to the targets, including more private participation, with the key incentive for compliance being continued, if not augmented, Central funds for systems upgrade.

A ‘citizens’ charter’ would be included in the regulatory framework, improving upon the current, laxly-implemented ‘standards of service’ outlined by state power regulators.