The Centre on Monday said aggregate technical and commercial (AT&C) losses of power distribution utilities declined to 17 per cent in 2021-22 from 22 per cent in the previous year.
Aggregate Technical and Commercial Loss (AT&C Loss) and average realisable revenue (ARR) indicators of electricity distribution companies performance.
In the last 2 years, the AT&C loss of the DISCOMs of the country was hovering at 21-22%. Ministry of Power instituted a number of measures to improve the performance of utilities. Preliminary analysis of data for FY2022 of 56 DISCOMs (distribution companies) contributing to more than 96 per cent of input energy, indicates that the AT&C losses of DISCOMs have declined significantly to 17 per cent in FY2022 from 22 per cent in FY2021, the Ministry said in a statement.
" The improvement is a result of the concerted efforts of the Ministry of Power, the State Governments as well as Distribution companies to implement the reforms and adoption of best practices. As a result - the viability of the power system has improved. This was necessary because the demand for power has been growing and further investments will be necessary for the power sector to expand to meet the growing demand; and the investments will only come if the power sector remains viable," the statement said.
The ministry has taken a number of measures to improve the performance of utilities.The reduction in AT&C losses has resulted in a reduction in the gap between the average cost of supply (ACS) and average realisable revenue (ARR).
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“The ACS-ARR Gap (on a subsidy received basis, excluding regulatory income & UDAY grant) has declined from Rs 0.69/kWh in FY2021 to Rs. 0.22/kWh in FY2022," the ministry added.
The decline of 5 per cent in AT&C losses and 47 paise in the ACS-ARR Gap in one year is the result of a number of initiatives taken by the Ministry of Power.
On 4 September, 2021, the Ministry of Power revised the prudential norms of PFC and REC, the lending agencies for the power sector. Loss-making discoms will not be able to avail financing from the two lenders until they draw up an action plan for reducing the losses within a specific timeframe and get their state government’s commitment to it.