The aggregate technical and commercial (AT&C) losses of distribution companies (discoms) have further declined to about 13.5 percent in FY23 from 16.4 percent in FY22, according to provisional data prepared by the Ministry of Power.
In 2021, the government had set the target to bring down AT&C losses to 12-15 percent by the financial year 2025. However, going by the latest provisional data, the government is likely to have achieved this target two years in advance.
According to data from the Ministry of Power, AT&C losses were as high as 25.5 percent in FY13. Till FY21, the AT&C losses stood at 22.3 percent. However, in FY22 it drastically declined to 16.4 percent.
"As per provisional data, in FY23, India's average AT&C losses have further come down to 13.5 percent. It is a big achievement considering that a decline of about 8.8 percentage points has been achieved in a short span of just two years," Alok Kumar, Secretary, Ministry of Power, told Moneycontrol.
AT&C losses are a combination of energy loss and commercial loss. While energy loss may comprise technical loss, theft, and inefficiency in billing, commercial loss constitutes default in payment and inefficiency in the collection.
Kumar said from FY21, the Union government began undertaking several result-driven reforms in order to set the distribution sector on the path to financial health and sustainability.
"The AT&C loss reduction has happened because of our flagship initiative - the Revamped Distribution Sector Scheme (RDSS), which incorporates a funding outlay of Rs 3 lakh crore to state discoms against the achievement of targets and loss reduction trajectory," he said.
"Apart from RDSS, other decisive measures such as late payment surcharge rules, prudential lending norms by Power Finance Corporation (PFC) and REC etc also have helped in loss reduction," Kumar said.
He, however, said that in the next two years, the AT&C losses would reduce further as more households get connected with pre-paid smart meters. "Right now energy losses have been taken care of. Once smart meters get widely installed in the next two years or so, we will start seeing a major decline in commercial losses too, as collections would drastically improve then," Kumar told Moneycontrol.
Prime Minister Narendra Modi on July 30, 2022, had expressed concern about the high AT&C losses in the power distribution sector and said that the same is currently in double digits, whereas in developed countries it is in single-digit.
“This means that we waste a lot of electricity, and therefore we have to generate more than we actually need to meet the demand. There is a lack of investment in reducing distribution and transmission losses in many states,” he had said at the official launch of the RDSS on July 30, 2022.
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