Union Minister of State for Power and New & Renewable Energy Shri Shripad Yesso Naik chairs the 3rd meeting of Group of Ministers constituted for addressing issues related to viability of distribution utilities in the country Inflation-indexed and cost-reflective power tariffs need of the hourUse of AI and digital innovations for financial viability of power sectorNeed to review Net-metering and RPO provisionsPrudent O&M cost and reasonable Return on Equity (RoE) should be allowed in Annual Revenue Requirement

Published on 30-Mar-2025 01:22 PM

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Addressing Distribution Utilities’ Financial Challenges Through Collaboration

Introduction: Shri Shripad Yesso Naik Leads the Third Meeting

In Lucknow, Shri Shripad Yesso Naik, the Union Minister of State for Power and New & Renewable Energy, chairs the third meeting of the Group of Ministers. The meeting focuses on addressing challenges in distribution utilities’ financial viability.

1. Financial Restructuring and Reintegration of Power Tariffs

The discussion emphasizes restructured financial measures, lowering interest burden, and developing storage solutions. They aim to lower subsidies for agricultural uses and improve daytime power supply, reducing purchase costs and subsidy burdens. These efforts are part of reactivating distribution utilities’ financial sustainability.

2. Digital Innovations for Financial Viability

AI and digital innovations are introduced to enhance financial management. This includes reviewing Net-metering provisions and implementing AI-driven solutions to ensure cost-reflective tariffs.

3. Review of RPO Provisions

The meeting reviews current RPO (Regulatory Procedures) to ensure compliance with financial targets, promoting a streamlined and efficient regulatory framework.

4. Ongoing Challenges in Operational Costs

Despite efforts, operational costs remain high. The need for strategies that align with RoE targets is addressed, focusing on inflation integration through restructured tariffs.

5. Promised ‘DAYNA’ Scheme Similar to UDAY

A new scheme, akin to the UDAY approach, is introduced to facilitate better resource management and strategic planning for distribution utilities.

6. State-Level Practices and Suggestions

Member states share practices in state-level distribution systems, offering feedback on best practices and policy updates aimed at fostering collaboration among states.

7. Regulatory Updates and Finalization Process

Regulations are revised to align with renewable energy adoption, while a detailed action plan is developed for financial sustainability targets.

8. Conclusion: Commitment to Financial Sustainability

The meeting reiterates commitments, calling for all states to contribute and inviting the AIDA (Average Investment, Average Demand, Average Interest, Average Cost) thought process from Odisha TATA Power Distribution.

9. April Fourth Meeting: Finalizing Strategies

A fourth meeting in Andhra Pradesh is scheduled, focusing on expanding strategies aligned with renewable energy and storage initiatives, with a finalization plan in place for financial sustainability targets.

This structured approach ensures clarity, flow, and comprehensive coverage of the key areas discussed during the meeting.

source: Union Minister of State for Power and New & Renewable Energy...

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