The second meeting of the Group of Ministers (GoM) on the viability of electricity distribution utilities was held in Mumbai. The meeting was attended by Maharashtra Chief Minister Devendra Fadnavis, who also holds the Energy Ministry portfolio in the state, along with Union Minister of State for Power and New & Renewable Energy, Shripad Yesso Naik, who chaired the meeting. Several other energy ministers from different states, including Tamil Nadu, Uttar Pradesh, Maharashtra, Andhra Pradesh, and Rajasthan, participated, either in person or via video conference. Officials from the central and state governments, as well as representatives from power utilities, Power Finance Corporation, and REC Ltd., were also present.
The Union Minister welcomed the members and thanked Maharashtra for hosting the meeting. He spoke about the challenges facing power distribution utilities and emphasized the need for reforms. He highlighted four key parameters crucial to improving the viability of power distribution—Aggregate Technical and Commercial (AT&C) loss, the gap between Average Cost of Supply and Average Revenue Realized (ACS-ARR Gap), accumulated losses, and outstanding debts. He pointed out that every 1% increase in AT&C losses results in financial losses exceeding Rs. 10,000 crore for utilities. He emphasized that renewable energy could help reduce power costs, citing Maharashtra and Rajasthan as examples. He also mentioned the need for advanced technologies like artificial intelligence for demand forecasting and power purchase optimization, timely payment mechanisms, and best practices among distribution companies. He stressed the importance of renewable energy, energy storage, and the Revamped Distribution Sector Scheme (RDSS).
The Chief Minister of Maharashtra expressed gratitude for holding the meeting in Mumbai and praised the efforts of the central government in strengthening the power distribution sector. He discussed the state’s energy distribution and the necessity for rapid expansion of renewable energy and storage solutions. He highlighted Maharashtra’s Mukhyamantri Saur Krishi Vahini Yojana, which provides daytime power supply to farmers, lowering electricity costs and reducing the state’s subsidy burden. He added that Maharashtra is working towards solarizing all agricultural feeders. He assured improvements in AT&C loss figures and discussed the state’s progress under the RDSS. He also requested the central government’s support for early release of Gross Budgetary Support under RDSS, reinstating schemes like UDAY, lowering interest rates on loans from REC and PFC, and reducing prepayment charges. He sought regulatory relaxations to allow DISCOM surpluses to be used for infrastructure development rather than being passed on as debt.
The Joint Secretary for Distribution at the Ministry of Power presented an overview of the financial and operational performance of the member states. The meeting discussed an action plan to reduce the outstanding debts and losses of distribution utilities and turn them profitable. Gujarat, which attended as a special invitee, shared its best practices and how it has made its DISCOMs profitable. Representatives from Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Rajasthan presented their current status, reforms, best practices, and future plans.
PRAYAS, a research group, gave a presentation on reforms needed to make the power distribution sector financially viable. The ministers reiterated their commitment to implementing necessary reforms. The Union Minister of State concluded the meeting by acknowledging the valuable suggestions provided by member states, stating that these inputs would help shape policies and future actions. It was decided that the third meeting of the GoM would be held in Uttar Pradesh in March.
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