Revamped Distribution Sector Scheme (RDSS)

SYLLABUS:

GS-3: Infrastructure – Energy

Context: Recently, the Power Ministry reported that only 2.41 crore smart meters have been installed across India out of the 20.33 crore sanctioned under the Revamped Distribution Sector Scheme (RDSS).

Key reasons for the slow pace of installation

Smart meter being a new concept, there were delays in issue of tenders and establishment of direct debit facility.
Collection and validation of data for Consumer Indexing.
Delays in Testing and approvals like Field installation and integration test, Factory acceptance test and likewise.

Revamped Distribution Sector Scheme (RDSS)

The Government of India launched the RDSS in July 2021 to improve the quality and reliability of power supply to consumers in India through a financially sustainable and operationally efficient distribution sector.
Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) have been designated as Nodal Agencies for the scheme.
The objectives of the scheme are to:
Improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient Distribution Sector.
Reduce the AT&C losses to pan-India levels of 12-15% by 2024-25.
Reduce ACS-ARR gap to zero by 2024-25.
The state-wise targets for each year will depend on their current levels of AT&C losses and ACS-ARR gap.
The revamped Distribution Sector scheme has the following parts:
Part A covers metering and distribution infrastructure works
Component I: Metering
Component II: Distribution infrastructure works
Component III: Project Management
Part B covers Training & Capacity Building and other Enabling & Supporting Activities
The Revamped Distribution Sector Scheme (RDSS) subsumes the following schemes:
Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
Integrated Power Development Scheme (IPDS)
Prime Minister’s Development Package (PMDP) for the erstwhile State of Jammu & Kashmir
The Government of India (GoI) has been supporting the States/ distribution utilities to improve their performance through various initiatives:

Significance of Smart Meters Installation

It provides real-time data, eliminating the need for estimated readings, which prevent from billing inaccuracies.
Automated data collection process minimises human error associated with manual meter reading and billing.
Help identify and prevent electricity theft, ensuring that utilities recover revenue for all energy consumed.

Key Government initiative to improve States/ distribution utilities’ performance

Allowing additional borrowing space of 0.5% of Gross State Domestic Product (GSDP) to the State if the distribution utility implements loss reduction measures.
Additional Prudential Norms have been specified for sanctioning of loans to State-owned Power Utilities, which is contingent on the performance of Power Distribution Utilities against prescribed parameters.
Rules for implementation of Fuel and Power Purchase Cost Adjustment (FPPCA) and cost-reflective tariff to ensure all prudent costs for the supply of electricity are passed through and are timely realised.