Discoms' aggregate technical & commercial losses down in FY22

Total technical and commercial (AT&C) losses from power distribution companies fell from 22 percent in the prior year to 17 percent in 2021-2022.

Reducing AT&C losses improves the finances of utilities (discoms), allowing them to better maintain the system and purchase power as required and benefit consumers, a statement from the Department of Energy said. The AT&C loss and ACS-ARR (Average Cost of Supply-Average Realizable Revenue) difference are important indicators of disco performance.

The Department of Energy has taken a number of measures to improve utility performance, the statement said. Preliminary analysis of 2021-22 data from 56 discoms that contribute more than 96 percent of input energy indicates AT&C losses fell significantly to 17 percent in FY2022 from 22 percent in FY2021, it stated.

Loss-making discoms will not be able to obtain funding from PFC (Power Finance Corporation) and REC until they have developed an action plan to reduce losses within a specified time frame and obtained a commitment from their state government to do so, under revised prudential standards adopted by the ministry on September 4, 2021.

The Department has also decided that a loss-making discom will only be eligible for future aid under a Discoms Distribution System Strengthening Scheme if it agrees to close the AT&C losses/ACS-ARR gap within a predetermined time frame to predetermined levels.

Under the Revamped Distribution Sector Scheme (RDSS), funding under the program will only be made available if the disco agrees to follow a predetermined loss reduction trajectory.

In addition, the ministry has worked with distribution companies to secure the funds required under RDSS to implement the loss mitigation measures.