AT&C Losses Among Distribution Companies Dips by 8% Between FY 2016 and 2020

Union Minister R.K. Singh replied to a question in the Rajya Sabha on whether the government has reviewed the assistance provided to states and power distribution companies (DISCOMs) under the Ujwal Discom Assurance Yojana (UDAY) program.

The minister informed that the Aggregate Technical & Commercial (AT&C) losses at the all India level have reduced from 23.70% in financial year (FY) 2015-16 to 21.83% in FY 2019-20, an 2% reduction in the five years.

While 18 DISCOMs witnessed a decline in AT&C losses, 12 DISCOMs saw an increase in AT&C losses between FY 2016 and 2020.

In February 2018, Mercom had reported that AT&C losses for the states and union territories under the UDAY had program increased from the previous year, according to government data. Ironically, the UDAY program was launched in the country to reduce the losses incurred by the distribution companies.


In its reply to the Rajya Sabha last month, the minister shared state-wise details regarding AT&C losses between FY 2015-16 and FY 2019-20.

State-Wise AT&C Loss (%)

During the five years, AT&C losses in Mizoram fell sharply by 41%, followed by Haryana (38%) and Manipur (36%).

Meanwhile, AT&C losses in Telangana surged by 71% during the five years, followed by Nagaland (58%) and Chhattisgarh (26%).

In March 2019, Mercom had reported that ₹5.75 billion (~$77.46 million) given to six states (Gujarat, Rajasthan, Jharkhand, Punjab, Telangana, and Kerala) to curtail their AT&C losses remained unutilized.

The Power Finance Corporation (PFC) had written to these six states regarding the timely completion of implementing the supervisory control and data acquisition (SCADA) /distribution management system (DMS) under the government’s Restructured Accelerated Power Development and Reforms Program (R-APDRP) to enhance reliability in the power distribution network.

During the five years between FY 2016 and 2020, Gujarat’s AT&C losses fell by 26%, Rajasthan’s losses were down by 6%, and Punjab’s losses were down by 10%. Jharkhand’s losses surged by 11%. As mentioned above, Telangana’s losses are the highest across the country.

In June this year, Union Finance Minister Nirmala Sitharaman had announced the ‘Economic Relief from Pandemic’ package and declared several sops for DISCOMs, including ₹3.03 trillion (~$40.82 billion) outlay for reform-based result-linked power distribution program.

Last month, the MOP issued detailed guidelines for reform-based result-linked power distribution programs over the next five years.

The program aims to improve power supply quality and reliability through a financially sustainable and operationally efficient distribution sector. The plan is to reduce the aggregate technical and commercial (AT&C) losses across India to 12-15% and eliminate the gap between the average supply cost and the aggregate revenue requirement by 2024-25.

 

Note: Percentage in the title has been updated from 8% to 2%