Union MoS for Power and New & Renewable Energy, Shripad Naik, chaired the third meeting of the Group of Ministers (GoM) on electricity distribution utilities’ financial viability.
PANAJI
Union Minister of State for Power and New & Renewable Energy, Shripad Naik, emphasised the role of artificial intelligence (AI), digital innovations, and cost-reflective tariffs in ensuring the financial sustainability of India’s power sector. He made these remarks while chairing the third meeting of the Group of Ministers (GoM) on electricity distribution utilities’ financial viability.
Naik highlighted that the health of power distribution companies (DISCOMs) directly impacts the broader economy. He stressed the need for financial restructuring of liabilities, lowering interest burdens on utilities, and facilitating daytime power supply for agriculture to reduce power purchase costs and subsidy burdens.
The meeting, held in Lucknow, was attended by energy ministers from UP, AP, MP, and Maharashtra, alongside officials from the central and state governments, power utilities, Power Finance Corporation (PFC) Ltd, and REC Ltd.
The discussions covered measures to enhance DISCOM financial health, including a proposed scheme similar to UDAY for restructuring debts. There was also a focus on reviewing regulators’ performance in tariff determination, expediting renewable energy adoption, and integrating storage solutions. Officials noted that delays in government department payments and subsidy disbursals were forcing DISCOMs to rely on working capital loans, further straining their finances.
Tata Power Distribution, Odisha, shared best practices for making DISCOMs profitable, and states presented their efforts to improve distribution efficiency. Participants suggested linking tariffs to inflation to prevent future price shocks.
The GoM reaffirmed its commitment to strengthening the power sector’s financial viability and called for greater political will from states. It was decided that the next meeting will be held in Andhra Pradesh in April, with the All India DISCOM Association (AIDA) invited for further discussions.
