PowerMin asks govt departments to switch to prepaid smart meters

The Union Power Ministry on Thursday said it has issued an advisory to all central ministries to direct organisations under their administrative control to ensure switch over to prepaid smart meters on priority.

The ministries have also been asked to issue all enabling orders in this regard. This follows a clarification issued by the Finance Ministry enabling all central ministries and 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, an official statement said.

The central government proposes set up a model for emulation by states for defining similar mechanisms that support prepayment of the electricity dues by their own departments, it said.

Estimates obtained from the States suggest the outstanding government department dues to be Rs 48,664 crore at the end of 2020-21, a value that is a colossal 9% of the annual power sector turnover.

“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 an inflationary pressure on their costs, thereby placing further stress on their viability,” the statement said.

ET on Thursday reported the government is considering allowing prepaid electricity meter suppliers the first claim on consumer power bills to avoid payment delays and attract investment in the space.

The Union power ministry is soon expected to issue standard bid documents (SBDs) for smart meter tenders by states willing to avail incentive under the Rs 3.03 lakh crore revamped power distribution scheme.

The Rs 3,03,058 crore scheme, entailing Rs 97,631 crore central government share, will have two major components –implementation of smart prepaid meters and discoms loss reduction trajectory.

Prepaid smart metering in Public-Private-Partnership (PPP) mode is a major component of the scheme.

The scheme proposes a grant of Rs 900 or 15% of the cost per consumer meter. An additional special incentive of 50% of the grants can also be installed if states install the targeted number of smart meters by December 2023.

While in all 25 crore smart meters are planned to be installed in five years, priority would be given to installation in a mission mode in the first phase in 500 AMRUT cities with higher technical losses 15%, Union Territories, industrial and commercial consumers and all government offices. It is proposed to install about 10 crore prepaid smart meters by December, 2023 in the first phase.