The Revamped Distribution Sector Scheme seeks to increase discoms’ operational efficiency and financial sustainability (excluding Private Sector DISCOMs).

The Features

• It will give conditional financial aid to discoms in order to enhance their supply infrastructure (power distribution companies).
• The financial support will be contingent on achieving pre-qualifying requirements and reaching basic minimum standards.
• All current power sector reform programmes, including as the Integrated Power Development Scheme, the Deen Dayal Upadhyaya Gram Jyoti Yojana, and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana, would be included under this umbrella programme.
• The programme will be offered through 2025-26.
• It would be based on a state-by-state action plan rather than a “one-size-fits-all” approach.
• Rural Electrification Corporation and Power Finance Corporation are the nodal agencies.

Challenges faced by DISCOMS 

• Aggregate Technical and Commercial (AT&C) Losses are incurred by the discoms.
  • Technical Loss: This occurs as a result of power flow in transmission and distribution networks.
  • Commercial Loss: This is due to power theft, metering flaws, and so forth.
• More than Rs 50,000 crore has been invested in rural networks over the last decade, although actual investments have been substantially lower than expected.
• Furthermore, the transformer and substation capacity in these locations were intended to accommodate this basic demand of 250 or 500 watts, assuming just the use of lights, fans, and televisions and not appliances such as refrigerators and mixers.
• Approximately 25% of energy sales are overly subsidised, and agricultural users also receive inconsistent, low-quality supplies.
• Despite attempts, there are still unmetered customers and non-functional metres at the consumer and feeder levels.
• Accurate energy accounting and loss monitoring are difficult to achieve in the absence of functional metres.

How RDSS helps

• It strives to enhance discoms’ operational efficiency and financial sustainability (excluding Private Sector DISCOMs).
• It will give conditional financial aid to discoms in order to enhance their supply infrastructure.
• Half of the money will be spent on improved feeder and transformer metering, as well as pre-paid smart consumer metering. The remaining half will be spent on power loss reduction and network enhancement, with central government funding covering 60% of the cost.
• It is an umbrella initiative that would incorporate all existing power sector reform programmes, including the Integrated Power Development Scheme, DDU Gram Jyoti Yojana, and Pradhan Mantri Sahaj Bijli Har Ghar Yojana.

Way forward

• States’ Role: States must identify implementation challenges, develop appropriate metering techniques, and develop frameworks for comparing benefits vs costs. States should underline the need for flexibility in their action plans and allow discoms to make an educated decision between prepaid and postpaid metering. Furthermore, the state regulator must establish a framework for evaluating cost savings and performance improvement as a result of smart metres, as well as safeguard customers from excessive tariff effects as a result of such expenditures. Central government institutions should also be adaptable in terms of monitoring, tracking, and funding disbursement.
• Meeting the Needs of Agricultural Consumers: Day-time, low-cost electricity may be delivered to a large number of farmers under the PM-KUSUM programme by erecting megawatt-scale solar facilities that offer 8 hours of quality power straight to designated agricultural feeders. This would meet farmers’ demand for supplies while cutting the discom’s cost and subsidy requirements in half. To expedite feeder solarisation, RDSS emphasises investments and awards for specialised agricultural feeders. It has the potential to deliver consistent supply while reducing subsidies.
• Strengthening Rural Networks: In order to fulfil rising demand, rural networks must be strengthened. Increased supply hours, appliance consumption, and rural company demands will necessitate increased network investment. Without this, there is a greater danger of power disruptions. The strategies for enhancing the RDSS system can be centred on this difficulty.
• Automatic Metering of Distribution Feeders: In order to demonstrate loss reduction, discoms frequently under-estimate losses by over-estimating unmetered use. To provide increased accuracy, all feeds must be outfitted with metres capable of conveying readings without the need for operator intervention. For this, states should take advantage of the RDSS’s emphasis on automated metre reading.

How to structure

1. Give an intro about Revamped Distribution Sector Scheme (RDSS)
2. Explain the features of it
3. Discuss the challenges faced by power distribution companies in India
4. Analyse whether the Revamped Distribution Sector Scheme (RDSS) addresses these challenges
5. Suggest way forward
6. Conclude

Reference:

1. https://indianexpress.com/article/opinion/columns/how-to-create-a-better-power-distribution-network-7760123