Revamped Distribution Sector Scheme sanctions Rs 1.30 lakh crore

Revamped Distribution Sector Scheme has sanctioned Rs 1.30 lakh crore for smart-metering works through December 2023, with about 19.79 crore prepaid consumer smart meters planned across states and Union territories. The programme also plans around 52 lakh distribution-transformer smart meters and 1.88 lakh feeder smart meters to expand measurement across distribution networks.

How much funding has RDSS sanctioned for smart metering?

RDSS had sanctioned Rs 1,30,474 crore for smart-metering works by December 2023, exceeding the Rs 1,21,778 crore sanctioned for loss-reduction infrastructure. The combined value of approved detailed project reports, or DPRs, was Rs 2,52,252 crore across 30 states and Union territories. A DPR is the implementation plan approved under the scheme.

Smart metering represented about 52% of the Rs 2,52,252 crore combined sanctioned pipeline, while loss-reduction works represented about 48%. This comparison shows that RDSS assigns a slightly larger sanctioned value to metering than to physical network-strengthening works, which are intended to reduce losses in the distribution system.

RDSS was launched on June 30, 2021 for FY 2021-22 to FY 2025-26, with a total outlay of Rs 3,03,758 crore and Gross Budgetary Support of Rs 97,631 crore. Gross Budgetary Support is central-government funding. The scheme applies to state-owned distribution companies, called DISCOMs, and state or Union territory power departments.

What does the RDSS prepaid smart-meter plan cover?

RDSS plans to deploy about 19.79 crore prepaid consumer smart meters, around 52 lakh distribution-transformer smart meters and around 1.88 lakh feeder smart meters. Consumer meters measure electricity use at individual connections, while distribution-transformer and feeder meters measure supply at network points serving groups of consumers.

The three levels of metering can support energy accounting by comparing electricity entering a feeder or distribution-transformer area with electricity recorded at consumer connections. The source describes Advanced Metering Infrastructure, or AMI, as a framework intended to improve energy accounting, reduce theft and enable prepaid billing.

RDSS gives priority to prepaid smart meters in 500 Atal Mission for Rejuvenation and Urban Transformation, or AMRUT, cities where Aggregate Technical and Commercial, or AT&C, losses exceed 15%. It also prioritises all Union territories, micro, small and medium enterprises, industrial and commercial consumers, government offices from block level upward, and other high-loss areas.

AT&C losses combine technical losses arising in the network with commercial losses associated with billing, collection and unauthorised use. Remaining consumer categories are proposed to be covered in phases by the respective DISCOMs. The 19.79 crore figure is therefore a planned deployment quantity, rather than a reported installation total as of December 2023.

How are RDSS smart-metering projects financed and delivered?

RDSS proposes prepaid and system metering through public-private partnerships, or PPPs, using a total-expenditure, or TOTEX, model that combines capital expenditure and operating expenditure. This model differs from a purchase-only arrangement because it includes both the meter installation cost and operating responsibilities.

Under the Smart Meter National Program framework described in the source, DISCOMs divide service areas among private concessionaires. The concessionaires procure, install and maintain smart meters for 10 years, while contracts are awarded through open auctions based on the annual amount payable per smart meter.

DISCOMs are expected to pay concessionaires from consumer collections, while the central government provides grants for installed smart meters. For states other than special-category states, the base grant is Rs 900 per consumer meter or 15% of meter cost, whichever is lower. Special-category states can receive Rs 1,350 per meter or 22.5% of cost, whichever is lower.

RDSS also offered a time-linked installation incentive for prepaid smart meters completed by December 2023. The additional incentive was Rs 450 per consumer meter or 7.5% of cost for other states, and Rs 675 or 11.25% for special-category states, subject in each case to the lower amount. These grant rules mean a sanctioned project value does not establish the eventual payment received by a DISCOM, concessionaire or equipment supplier.

Which regions account for the largest RDSS smart-metering sanctions?

Northern states held the largest smart-metering sanction at Rs 38,356 crore through December 2023, followed by southern states at Rs 31,845 crore and western states at Rs 26,326 crore. These three regions together accounted for Rs 96,527 crore, or about 74%, of the Rs 1,30,474 crore smart-metering sanction.

The North had Rs 43,292 crore of loss-reduction works sanctioned, compared with Rs 38,356 crore for metering. The South had a different allocation pattern, with Rs 31,845 crore of metering works versus Rs 20,790 crore of loss-reduction works. The West similarly had Rs 26,326 crore for metering and Rs 20,246 crore for loss reduction.

The North grouping includes Himachal Pradesh, Uttarakhand, Punjab, Haryana, Rajasthan, Uttar Pradesh, Delhi, Jammu and Kashmir and Ladakh. The West grouping includes Gujarat, Goa and Maharashtra. The regional sanction data identifies where the approved pipeline is concentrated, but it does not provide installation progress by region.

What operating and financial results is RDSS targeting?

RDSS targets pan-India AT&C losses of 12% to 15% and a zero average cost of supply-average revenue realised, or ACS-ARR, gap by 2024-25. The ACS-ARR gap measures the difference between a DISCOM's supply cost per kilowatt-hour and the revenue realised per kilowatt-hour.

The source reports that DISCOM AT&C losses declined from 22.32% in FY 2021 to 16.44% in FY 2022. Over the same period, the ACS-ARR gap declined from Rs 6.90 per kilowatt-hour to Rs 0.15 per kilowatt-hour. The source attributes the changes to RDSS reform measures along with other Ministry initiatives, rather than isolating smart metering as the sole cause.

Funds released remained below sanctioned work values at the cited date. RDSS had released Rs 5,897.22 crore from scheme launch through December 6, 2023, under its guidelines. Releases depend on DISCOMs meeting mandatory pre-qualifying criteria and being assessed through the scheme's Result Evaluation Matrix, which links funding to reform and performance conditions.

Conclusion

RDSS makes prepaid smart metering a principal component of its approved distribution-modernisation pipeline: Rs 1,30,474 crore was sanctioned for metering through December 2023, compared with Rs 1,21,778 crore for loss-reduction works. The planned 19.79 crore consumer meters, supported by distribution-transformer and feeder meters, are designed to extend energy accounting and prepaid billing across the distribution network.

The next measure of progress is execution through FY 2025-26, the stated scheme period. The disclosed plan depends on DISCOMs completing phased deployments and PPP procurement while meeting result-linked conditions, and the unresolved outcome is whether implementation supports the scheme's 2024-25 targets for 12% to 15% AT&C losses and a zero ACS-ARR gap.