Sikkim gets on board for UDAY, Rs 356-cr benefit seen

Sikkim has become the 22nd state to join UDAY -- the scheme designed to nurse debt-laden electricity distribution companies back to health -- which will in turn hand it an overall benefit of Rs 356 crore.
"The Government of India and Sikkim signed a memorandum of understanding (MoU) under the Scheme Ujwal Discom Assurance Yojana (UDAY) today, for operational improvement of the state's Power Distribution Department," a power ministry statement said.
With the signing of the MoU, the total number of states covered under UDAY has reached 22. According to the statement, Sikkim will earn an overall net benefit of about Rs 356 crore through UDAY by way of cheaper funds, reduction in AT&C (aggregate technical and commercial) and transmission losses, interventions in energy efficiency, etc during the turnaround.

The MoU paves the way for improving operational efficiency of the power distribution department of the state. The reduction in AT&C and transmission losses to 15 per cent and 3.50 per cent, respectively, is likely to bring in additional revenue of around Rs 328 crore.
Demand-side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans, air-conditioners and efficient industrial equipment through PAT (perform, achieve, trade) will help reduce peak load, flatten load curve and reduce energy consumption in the state. The gain is expected to be around Rs 25 crore.
The ultimate gainers will be power consumers of Sikkim as reduced level of transmission and AT&C losses means lesser cost per unit of electricity.

Further, the statement said the financially and operationally healthy State Power Distribution Department will be in a position to supply more power.
Higher demand for power will mean higher PLF (plant load factor) of generating units and therefore, lesser cost per unit of electricity, which will again mean lesser cost for the consumers, it said.
The scheme will also allow speedy availability of cheaper power to households in the state that still go without electricity, it added.