The Centre has put in place additional measures that are aimed at improving the financial health of discoms by streamlining the process of accounting, reporting, billing and payment of subsidy by the state governments to the power distribution companies, an official release stated on July 30.
The measures come in the wake of the "need for a framework for sustainability of the sector" and the "fact that improper and non-transparent accounting as well as non-payment or delayed payment of subsidy" is one of the reasons for financial distress of discoms, stated the Ministry of Power.
The new rules, which are aimed at addressing these issues, were notified on July 26, the ministry noted.
"The rules mandate that a quarterly report shall be submitted by the distribution licensee within 30 days from end date of the respective quarter and the State Commission shall examine the report, and issue it within 30 days of submission of the quarterly report," it said.
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The report will inter-alia cover the findings regarding raising of demands for subsidy based on accounts of the energy consumed by the subsidised categories; and the subsidy payable to these categories as announced by the state government and the actual payment of subsidy in accordance with the law, the release added.
Provision has been made that if subsidy accounting and the raising of bills for subsidy is not found in accordance with the rules, then the State Commission will be mandated to "take appropriate action against those responsible for non-compliance", the ministry said.
Under the framework for sustainability, in order to define a definite and reasonable goal for reduction of Aggregate Technical and Commercial (AT&C) loss, the new rules prescribe that the "AT&C loss reduction trajectory would be approved by the State Commissions for tariff determination in accordance with the trajectory agreed by the respective state governments and approved by the central government under any national scheme or programme, or otherwise", it added.
The trajectory for both collection and billing efficiency, for distribution licensee have to be determined by the state commission, accordingly, the ministry clarified.
In order to ensure the recovery of full costs incurred by the distribution licensee in distributing electricity, "it has been prescribed that all prudent costs of power procurement, done in a transparent manner, would be taken into account, while approving the tariff", the release further added.
Similarly, all the prudent costs incurred by the distribution licensee for creating the assets for development and maintenance of distribution system would be accounted for subject to fulfillment of prescribed conditions, it noted.
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