Switch over to prepaid smart meters on priority: Power Ministry issues advisory to central govt offices

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New Delhi: The Ministry of Power has issued an advisory to all central ministries to direct organizations under it to switch to prepaid smart electricity meters.

"The Ministry of Power has issued an advisory to all central ministries of the government to direct organisations under their administrative control to ensure switch over to prepaid smart meters on priority," a Power Ministry statement said on Thursday.

This follows a clarification issued by the Ministry of Finance enabling all central ministries and central departments to make advance payments for pre-paid metered electricity without insisting on any bank guarantees, while at the same time ensuring proper accounting arrangements.

It said that prepaid smart metering in all government departments would not only bring DISCOMs back on the path of financial sustainability and promote energy efficiency but would also serve as a model for similar state department mechanisms to promote pre-payment of electricity.

The Government of India is committed to providing uninterrupted, reliable, and quality power supply to all the consumers, for which an operationally efficient and financially sustainable power sector is a must. DISCOMs are often termed as the most important, but the weakest link in the power sector value chain, as their poor financial health at the bottom of the value chain has far-reaching negative impacts upstream.

Apart from the operational inefficiencies that cause financial losses, mounting electricity dues of the government departments, including the central and state governments; Urban and Rural local bodies; and government Boards and Corporations due to delayed and inadequate payments for electricity usage also causes cash flow distress in DISCOMs.

The interest burden on the additional working capital availed by DISCOMs to tide over the shortfalls further creates inflationary pressure on their costs, thereby placing further stress on their viability.

Estimates obtained from the States suggest the outstanding Government department dues to be Rs 48,664 crore for the year 2020-21, a value that is a colossal 9 per cent of the annual power sector turnover.