After Punjab, Haryana Joins “Uday” Scheme

After Punjab, Haryana Joins “Uday” Scheme

Chief Minister of Haryana, Manohar Lal Khattar launching the UJALA (Unnat Jyoti by Affordable LEDs for All), at a function, in New Delhi on March 11, 2016. The Minister of State (Independent Charge) for Power, Coal and New and Renewable Energy, Piyush Goyal was also present.

Team EnergyInfraPost

Haryana has become the eighth state after Punjab to join the UDAY Scheme for operational and financial turnaround of the DISCOMs.

UDAY is an effort to make the DISCOMs financially independent and operationally healthy, to be able to supply adequate power at affordable rates, through 100% Village electrification and 24X7 Power For All.

The Centre, the State of Haryana and the DISCOMs of Haryana (Uttar Haryana Bijli Vitran Nigam Ltd. and Dakshin Haryana Bijli Vitran Nigam Ltd.) have signed an Memorandum of Understanding (MOU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” on March 11, 2016.

The signing ceremony was held in the presence of the Chief Minister of Haryana Manohar Lal Khattar and the Union Minister of State (IC) for Power, Coal and New & Renewable Energy Piyush Goyal.

Haryana is the 8th State to sign MoU under UDAY. With Haryana coming into the fold, the combined DISCOM debt that would be restructured in respect of these states is around Rs.1.94 lac crore, which is approximately 45% of the total outstanding DISCOM debt of Rs.4.3 lac crore as on 30th September, 2015.

The Government of Haryana has taken a major step towards improving the financial health of the DISCOMs by signing the MOU under UDAY and agreeing to take over the debt of the DISCOMs. The Government of Haryana would take over Rs.25950 crore of DISCOM debt, being 75% of the total DISCOM debt of Rs.34600 crore outstanding as on 30.09.2015, as envisaged in the scheme.

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The scheme also provides for the balance debt of Rs.8650 crore to be re-priced or issued as State guaranteed DISCOM bonds, at coupon rates around 3% less than the average existing interest rate. The annual saving in the interest cost to the State would be around Rs.1040 crore on account of restructuring of the DISCOM debt.

UDAY not only focusses on bringing about financial turnaround of the DISCOMs. It also lays stress on improving operational efficiencies of the DISCOMs.

In order to bring about a sustainable turnaround of the DISCOMs, the State of Haryana and the DISCOMs will improve operational efficiency through compulsory Feeder and Distribution Transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, thereby bringing about reduction in transmission losses and AT&C losses, besides eliminating the gap between cost of supply of power and realisation.

The reduction in AT&C losses and transmission losses to 15% and 2.50% respectively is likely to bring additional revenue of around Rs.7150 crore during the period of turnaround.

With the financial turnaround through financial and operational efficiencies, the rating of the DISCOMs would improve, which would help them in raising cheaper funds for their future capital investment requirement. This is expected to provide interest cost saving of around Rs.90 crore. to the DISCOMs.

While efforts will be made by the State Government and the DISCOMs to improve the operational efficiency of the DISCOMs, 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.

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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.2100 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 Haryana.

The gain is expected to be around Rs.1700 crore.

The ultimate benefit of signing the MOU would go to the people of Haryana. Higher demand for power from DISCOMs would mean higher PLF of Generating units and therefore, lesser cost per unit of electricity thereby benefitting consumers. The DISCOMs would also increase power supply in areas with reduced AT&C losses.

The scheme would allow speedy availability of power to around 2.85 lakh households in Haryana that are still without electricity. Availability of 24×7 power to hitherto unconnected villages/households etc. would boost the economy, promote industries, thereby improving employment opportunities and see Haryana develop into one of the leading industrialised States in India.

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An overall net benefit of approximately Rs.14160 crore. would accrue to the State by opting to participate in UDAY, by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.