Uday also envisaged the installation of smart meters for consumers using more than 200 units of electricity every month by December, 2019. (Reuters)

The performances of several state electricity distribution companies (discoms) have seen an improvement since they signed up for the Ujwal Discom Assurance Yojana (Uday). Some effort has been made by discoms to lower the aggregate technical and commercial (AT&C) losses and also to narrow the gap between the discoms’ average cost of supply (ACS) and average revenue realised (ARR), data on the Uday portal, show. AT&C losses, among the key benchmarks used to evaluate the performance of discoms, have come down to 19.68% in March, 2017 from about 24% a year ago. At the end of March, the ACS-ARR gap stood at Rs 0.49/unit, down from Rs 0.56/unit on March 31, 2016. Given that 1,134,631 million units of electricity were consumed in FY17, the narrowing of the ACS-ARR gap translates into savings of over Rs 7,900 crore.

However, while more than 21 lakh distribution transformers had been metered till March, 2017, the number is not even 50% of the target which needs to be met by December , 2017.

The metering of distribution transformers helps reduce technical losses and minimise outages. Uday also envisaged the installation of smart meters for consumers using more than 200 units of electricity every month by December, 2019. Only 1% of this target has been met so far.

AT&C losses are to be brought down to 15% and the ACS-ARR gap completely eliminated by FY19, according to targets laid out in the Uday agreements.

Discoms across the participating states had saved Rs 11,989 crore in interest costs till December 2016. However, the savings were owing to savings in interest costs; the scheme mandated that states take over a major chunk of their debt, resulting in lower interest costs.

With plant utilisations at low levels and discoms in financial distress, many states have been reluctant to sign new power purchase agreements. The predicament has left about 33,000 MW power plants stranded for want of electricity buyers.

Under Uday, state governments are required to take over 75% of the short-term liabilities of their respective discoms (as in September-end 2015), 50% in the first year (FY16) and the balance in FY17. The accumulated losses of discoms stood at a staggering Rs 3.8 lakh crore at the launch of Uday. Their outstanding debt then stood at Rs 4.3 lakh crore.

The scheme was launched in March 2015.