State-wise DISCOMs Losses : How Power Reforms helps to cut AT&C losses by 33 % in last 8 years

StateWise DISCOMs Losses Data in India:  The ever-rising loss of our power distribution companies i.e. DISCOMs has been a pain point for India. The DISCOMs loss is technically termed as AT&C (Aggregate Technical & Commercial) loss. In FY 2020, DISCOM’s loss exceeded Rs 5 lakh crore. Recently, the Union Ministry of Power announced that the power reforms has helped them to reduce the AT&C loss of DISCOMs upto 17 %. Nevertheless, there are still many states that are not able to handle AT&C’s losses. Let’s deep dive into data to find out the best and worst performers.

What is AT&C Loss?

AT&C (Aggregate Technical & Commercial) loss refers to the loss in power distribution. The current 17% AT&C loss in the country means a loss of Rs 17 for every Rs 100 spent on the purchase of electricity. Gross technical loss in AT&C includes technical loss of power, power theft, and shortfall in billing. The commercial loss also includes failure to pay and delay in payment.

AT&C losses reduced up to 33 % in the last 8 years

In the year 2014-15, one-fourth of the country’s DISCOMs could not recover the price of electricity. As a result, their losses were mounting. The government aims to reduce AT&C losses to 12-15% across India by 2024-25. DISCOMs have been given financial assistance to boost their infrastructure through the Revamped Distribution Sector Scheme (RDSS) from the Ministry of Power. DISCOMS must also meet certain criteria to qualify for this facility.

AT&C losses of DISCOMs were reduced to 20.9% in FY 2019-20. But it surged up to 22 % in the following covid-affected year. Currently, AT&C's losses have narrowed down to 17 %. In the last 8 years, AT&C losses have come down by one-third, though it is still short of our target.

ACS-ARR Gap reduces

ACS (Average Cost of Supply) is the cost per unit of electricity to a DISCOM. ARR (Average Revenue Realized) is the total price realized by selling electricity. However, state-wise there may be a slight difference in the evaluation criteria.

In 2014-15, the ACS ARR gap was 0.58 paise per unit. In the year 2019-20, it was reduced to 30 paise. During the following year, 2020-21, the gap surged to 69 paise per unit. According to the latest data, it has come down to just 17 paise per unit. In the last 8 years, the overall ACS ARR gap has been trimmed by 62 %.
However, it is still a work in progress, as the government aims to reduce it to zero by 2024-25.

State-Wise AT&C Losses of India

The figures for AT&C losses in some states of the country are shocking and discloses the  efficiency of the system in the state. AT&C losses in Arunachal Pradesh and Jammu and Kashmir have jumped to 64.3% and 61.6% in the last 8 years.

In Uttarakhand, where the AT&C deficit was 18% in 2014-15, it has doubled to 38.1% in 8 years. AT&C loss in another hill state Himachal Pradesh has also jumped up from 9.7% to 12.1%.
AT&C losses have increased by 73% in Punjab. AT&C's loss in the state in 2014-15 (15.9%) was below the national average, which has surged to 27.5%, as revealed by the latest data.

Kerala is among the few states that have made significant progress. AT&C loss in Kerala has decreased to 8.2% from 12.4% eight years ago. Besides Kerala, Andhra Pradesh (11.2%), Gujarat (12.1%), Himachal Pradesh (12.5%), Karnataka (13%), Goa (13.4%), Tamil Nadu (13.7%) and Rajasthan (15 %) are states which have AT&C losses is lower than the national average (17%).

As discussed earlier, Arunachal Pradesh, Jammu and Kashmir and Uttarakhand have AT&C ratios above the national average. Besides these states, Jharkhand (34.7%), Bihar (33.7%), Madhya Pradesh (28.7%), Punjab (27.5%), Uttar Pradesh (26.5%), Telangana (20.3%), Assam (20.1%), Maharashtra (18.9%) and Chhattisgarh (18.6%) has comparatively high AT&C ratio.

Karnataka and Gujarat have improved significantly. Both states have cut losses by 25 %. At the same time, Uttar Pradesh and Bihar have improved on AT&C losses by 33% and 22.1%. However, there is still much to be done.