India earmarks Rs 22,500 crore for smart pre-paid meters under new discom scheme

The union cabinet approved a sum of Rs 22,500 crore as the central government grant for the installation of 25 crore smart prepaid meters across the country under the Rs 3-lakh-crore scheme for power distribution entities (discoms).

The total outlay for smart-metering under the scheme is Rs 1.5 lakh crore, of which the Centre will provide Rs 900 per meter to the discoms, which comes to around 15% of the cost of these devices. States which are able to install smart prepaid meters before December 2023 will also be eligible for an additional incentive of Rs 450 per meter.

According to an office memorandum released by the Union power ministry on the details of the discom scheme, the new meters are to be installed first in the 500 cities covered under the Atal Mission for Rejuvenation and Urban Transformation (Amrut) programme where aggregate technical and commercial (AT&C) losses — an indicator of pilferage — are greater than 15%.

Priorities will also be given in the installation of smart prepaid meters in UTs, industrial and commercial consumers, government offices and areas with high loss levels. The funds will be received by the states only after successful demonstration of one prepaid billing period.

Union power minister informed the Parliament that about 25.2 lakh smart meters have been installed across the nation, and around 81 lakh smart meters are at different stages of implementation. Prepaid electricity meters are seen to be a major tool to aid the efforts of discoms to cut pilferage and reduced their gap between the cost of power supply and revenue realised by ensuring timely payments from consumers.

Prepaid meters are also envisaged to ensure adequate liquidity in the hands of discoms, enabling them to pay power generators in advance and become eligible to receive a rebate of around 1.5% to 2% on the power purchase costs. The minister pointed out that assessment of the smart meters installed under the government’s smart grid pilot projects have revealed up to 15% reduction in AT&C losses. In some areas, discoms have reported an increase in earnings in the range of Rs 200-500 per consumer meter per month wherever smart meters have been installed.

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