India’s average AT&C losses in electricity sector climbs to 22.32%

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India’s average Aggregate Technical & Commercial (AT&C) loss in the electricity sector increased from 20.73 percent in 2019-20 to 22.32 percent in 2020-21, revealed Power Finance Corporation’s (PFC) annual performance report on power utilities, which was released on October 14.

The report on “performance of power utilities 2020-21” released by union power minister RK Singh found that both billing efficiency and collection efficiency decreased in the last financial year, resulting in a further increase in the national average AT&C loss.

“The average AT&C losses for distribution utilities at the national level deteriorated from 20.73 percent in 2019-20 to 22.32 percent in 2020-21. While billing efficiency decreased from 85.41 percent in 2019-20 to 84.07 percent in 2020-21, collection efficiency deteriorated marginally from 92.80 percent to 92.40 percent over the same period,” read the report accessed by 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 collection.

The latest report showed that Nagaland had the highest AT&C loss of 60.39 percent, followed by Jammu and Kashmir (59.28 percent), Andaman & Nicobar Islands (51.94 percent), Arunachal Pradesh (44.87 percent), Madhya Pradesh (41.47 percent), Jharkhand (41.36 percent). The situation was the same in larger states such as Uttar Pradesh (27.12 percent), Rajasthan (26.23 percent), Maharashtra (25.54 percent), and so on.

Andaman & Nicobar Islands also saw a deterioration in AT&C losses in 2020-21 (51.94 percent) compared to 2019-20 (23.34 percent), Andhra Pradesh (from 10.77 percent in 2019-20 to 27.25 percent in 2020-21), Madhya Pradesh (30.38 percent to 41.47 percent), Maharashtra (18.56 percent to 25.54 percent), among others.

The deterioration in the AT&C loss is significant because, on July 30, Prime Minister Narendra Modi had launched the revamped distribution sector scheme (RDSS) with an aim to bring down AT&C losses to 12-15 percent by the financial year 2025. A budgetary outlay of Rs 3.03 trillion for five years has been allotted for the same.

PM Modi had on July 30, for the first time, expressed concern about India’s high AT&C losses in the power distribution sector and acknowledged that the same is currently in double digits, whereas in developed countries across the world, it is in single-digit.

“This means that we have a lot of wastage of electricity and therefore we have to generate more electricity 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 launch of the RDSS.