Views of S.N. Sahai

“It is the discoms that carry the bulk of the burden”

At the recent states’ power and renewable energy ministers’ conference – the first ever to be held virtually – important measures to mitigate the impact of Covid-19 on the power sector as well as reform measures for the distribution segment were discussed.

S.N. Sahai, secretary, Ministry of Power, while delivering the opening remarks at the conference spoke about the current state of the sector, the pandemic-induced challenges confronting it, the key priorities, and the way forward. Excerpts…

We are having this conference today at a very difficult time as we face the challenges of the Covid-induced pandemic. I would like to commend and thank the entire power fraternity for having worked tirelessly during the lockdown period and ensuring that power reaches every consumer, that hospitals and essential services were running, and people who were working from home had uninterrupted supply of electricity.

In particular, the way all the state and union territory discoms came together on April 5, 2020 to manage the grid (during the 9 p.m. 9-minute lights switch-off event) is testimony to our joint vision in the way we can all work together and solve any problem that may arise. I am particularly grateful to all the state governments for having stood by us at that point of time.

The pandemic has brought to the fore some of the basic issues that have been confronting the power sector, especially the question of liquidity, the price of power and the ability of people to pay. The government has responded by bringing out certain schemes to ease the situation, but it is the discoms that carry the bulk of the burden, and will need to respond in their own particular way to this situation.

The pandemic has shaken the foundation of the way we live and do business. The way we do business is now being restructured. A new order is emerging – people are working from home and school classes are being conducted electronically over the internet. In this new order, the fractures, the fissures and the problems that the power sector faces have come to the fore and it is in this context that this conference is significant because we have to take important steps immediately.

We cannot brush important issues under the carpet any longer. For example, in spite of significant investments in infrastructure and various attempts at reforms, the gap between the average cost of supply and the average revenue realised continues to be around 72 paise per unit in 2018-19. Aggregate losses have mounted, from Rs 294.5 billion in 2017-18 to Rs 496.23 billion in 2018-19. Aggregate technical and commercial losses are 22 per cent. The aggregate net worth of discoms is negative Rs 805.67 billion.

How can we perform with the way things are. The agenda today seeks to confront these issues. If we are all on the same page, together we will be able to solve the problems that face us.

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