New Delhi: Aggregate Technical and Commercial Loss (AT&C) losses of power distribution companies have declined significantly to 17 per cent in the financial year 2022 from 22 per cent in the financial year 2021.
This is a sharp reduction from the last two years when AT&C losses of discoms were in the range of 21 per cent to 22 per cent.
According to official sources, the reduction in AT&C losses was calculated after analysis of the data of the financial year 2022 of 56 discoms, contributing to more than 96 per cent of input energy.
Reduction in AT&C losses improves the finances of the utilities, which will enable them to better maintain the system and buy power as per requirements, benefitting the consumers.
The reduction in AT&C losses has resulted in a reduction in the Gap between Average Cost of Supply (ACS) and Average Realisable Revenue (ARR). The ACS-ARR Gap (on a subsidy received basis, excluding Regulatory Income & UDAY Grant) has declined from Rs 0.69 per kWh in 2021 to Rs 0.22 per kWh in 2022.
The decline of 5 per cent in AT&C losses and 47 paise in the ACS-ARR Gap in one year is a result of some reform measures taken by the power ministry.
On September 4, 2021, the power ministry revised the prudential norms of PFC and REC, the lending agencies for the power sector, to provide that loss-making discoms will not be able to avail financing from them until and unless they draw up an action plan for reducing the losses within a specific timeframe and get their state governments commitment to it.
The ministry had also decided that any future assistance under any scheme for strengthening the distribution system by the discoms will be available to a discom which is making losses, only if it undertakes to bring its AT&C losses and ACS-ARR Gap down to specified levels within a specific timeframe and gets their respective state governments commitment to it.