The aggregate technical and commercial (AT&C) losses of Discoms, which stood at a high of 25.7 per cent in FY15, is likely to have come down to 13.5 per cent in FY23 buoyed by the Union Power Ministry’s efforts to improve the performance of utilities.

Besides, the gap between average cost of supply (ACS) and average revenue realised (ARR) has also come down significantly from ₹0.54 per kWh in FY15 to ₹0.15 per kWh in FY22.

The AT&C loss and the ACS-ARR gap are key indicators of Discom performance.

“The entire world has seen how India’s power sector transformed in the last nine years. The government has connected every home with power, which is very commendable. We have transformed from a power deficit country to a power surplus nation,” Power and New & Renewable Energy Minister RK Singh said in a media interaction on achievements of the government in the last nine years.

Checking losses

The Minister explained that the feat has been achieved through the concerted efforts by the Ministry. This change has been brought by implementing the revised prudential norms for lending by PFC and REC.

Besides, the reform conditions in Revamped Distribution Sector Scheme (RDSS), the conditional additional borrowing window to States, mandatory energy accounting and auditing for all Discoms, and the late payment surcharge rules has added to this, he said.

During his presentation, Power Secretary Alok Kumar noted that the continuous efforts by the Centre has aided in bringing down the AT&C losses as well as the ACS-ARR gap.

Kumar added that the AT&C losses are expected to have declined to around 13.5 per cent in the last financial year.

Power sector viability

To address the issue of mounting debt of State power utilities, the Ministry issued the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 (LPS Rules 2022). Since their implementation (April 12, 2023), the total bills amounting to ₹3,95,799 crore have been settled since August 2022 (over and above the EMI payments against legacy dues and including disputed invoices), Singh pointed out.

Against the legacy dues of ₹1,39,747 crore (as on June 3, 2022), the 13 States and UTs have paid installments of ₹64,196 crore (in 11 EMIs).

Seven States out of these 13 opted for loans from PFC and REC to pay EMIs (total loan disbursed of ₹45,044 crore). Further, 20 States and Uts have reported to have no outstanding dues as on June 3, 2023.

Now the legacy dues have come down from ₹1,39,747 crore to ₹75,551 crore, and the current payments are up-to-date.

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