Lok Sabha Question No. 611 (UNSTARRED), answered on 2021-07-22
Subject: Losses to Power Distribution Companies
Ministry: POWER
Asked by: Sanjay Haribhau Jadhav, Omprakash Bhupalsinh alias Pawan Rajenimbalkar

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.611

## TO BE ANSWERED ON 22.07.2021

## LOSSES TO POWER DISTRIBUTION COMPANIES

†611.  SHRI SANJAY JADHAV: SHRI OMPRAKASH BHUPALSINH ALIAS PAWAN RAJENIMBALKAR:

Will the Minister of POWER be pleased to state:

- (a) whether  the  power  distribution  companies  are  regularly  incurring  losses  year after year in various States;
- (b) if so, the details thereof including the factors responsible for the same;
- (c) the  names  of  those  States  which  are  effectively  implementing  power  sector reforms in the country;
- (d) the details of transmission and distribution losses in the said States;
- (e) whether  there  has  been  no  decline  in  the  transmission  and  distribution  losses despite the power sector reforms; and
- (f) if so, the details thereof along with the steps being taken/proposed to be taken to reduce the transmission and distribution losses?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI  R.K. SINGH)

- (a) & (b) : Yes,  Sir.    Aggregate  Technical  and  Commercial  (AT&C)  losses  over  the period FY 2014-15 to the year 2019-20 are as follows:

|                 |   FY 2014-15 |   FY 2015-16 |   FY 2016-17 |   FY 2017-18 |   FY 2018-19 |   FY 2019-20 |
|-----------------|--------------|--------------|--------------|--------------|--------------|--------------|
| AT&C losses (%) |        25.72 |         23.7 |         23.5 |        22.38 |        22.03 |        21.83 |

The  reasons  for  the  losses  of  Utilities  are  primarily  tariffs  not  being reflective of costs; shortfall in payment  of subsidies announced  by  the State Governments and non-payment of dues of electricity of the Departments by the State Governments and the Local Bodies.

(c) & (d) : The AT&C losses, which include the Transmission and Distribution losses, and  the  gap  between  Average  cost  of  Supply  (ACS)  and  Average  Revenue  Realizable (ARR), also called the ACS-ARR gap,  are  the  most  important  parameters outlining  the performance  of  Distribution  Utilities.  The  overall  operational  performance  and  reform parameters of the Utilities including AT&C losses are reflected in the Annual Integrated ratings  of  the  State  Distribution  Utilities  published  by  PFC.  As  per  the  latest  Ninth Annual Integrated rating  of  State Distribution  Utilities  published  in  July,  2021,  Power Distribution  Utilities  in  the  States  of  Gujarat,  Haryana,  Punjab  and  Maharashtra  have achieved high ratings. The AT&C losses of the high ranking Utilities of these States for FY 2019-20 are attached as Annexure.

- (e) : There  has  been  a  steady  decrease  in  the  AT&C  Losses  in  the  country. These losses have reduced from 25.72 % in the year 2014-15 to 21.83 % in the year 2019-20.
- (f) : As  stated  in  the  answer  to  part  (e)  there  has  been  a  steady  decline  in AT&C  losses  in  the  Country.  Distribution  of  Electricity  falls  under  the  purview  of respective  Distribution  Utilities  and  it  is  the  responsibility  of  respective  Utilities  to reduce  the  losses  in  the  distribution  sector.  Government  of  India  supplements  the efforts of the States/Utilities by launching various schemes from time to time such as Integrated  Power  Development  Scheme  (IPDS)  and  Deen  Dayal  Upadhyay  Gram  Jyoti Yojana (DDUGJY). Funding has been provided to the States under these schemes for creation and augmentation of Sub-Transmission and Distribution Infrastructure; Metering  of  Distribution  Transformers,  Feeders  and  Consumers;  Underground  Cabling and  Aerial  Bunched  Cables;  and,  IT  enablement  of  Distribution  Infrastructure  for reduction of losses.

To further support the efforts of States towards reforms, the Government of India has recently approved a  Reforms-Based and  Results-Linked  Revamped Distribution  Sector  scheme  to  improve  the  operational  efficiencies  and  financial sustainability of all Distribution Utilities excluding Private Sector Utilities. The Scheme would be available till the year 2025-26 and would have an outlay of Rs. 3,03,758 crore with an estimated Gross Budgetary Support from the Government of Rs. 97,631 crore for strengthening  of  supply  infrastructure  including  installation  of  prepaid  Smart  Meters, which will  help  in  reduction  of  losses.  The  scheme  has  an  objective  for  reduction  of AT&C losses to pan India levels of 12 to 15% by 2024-25.

The Government has also come out with a Liquidity Infusion Scheme under which  PFC  and  REC  Ltd.  have  extended  loans  to  Distribution  Companies  which  have submitted a credible action plan to reduce AT&C losses and ACS-ARR gap. Action plan will  also  have  Undertaking  by  States  to  liquidate  the  payments  due  to  DISCOMs  on account  of  electricity  dues  of  Government  departments/attached  offices  etc.  and subsidies, along with timelines to install smart prepaid meters in  Government departments/ attached offices etc.

**************

ANNEXURE ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (c)  &  (d)  OF  UNSTARRED QUESTION NO. 611 TO BE ANSWERED IN THE LOK SABHA ON 22.07.2021 **************

|   Rank | State       | Name of Utility                                        | 9 th IR Rating   |   AT&C Loss (%) FY 2019-20 |
|--------|-------------|--------------------------------------------------------|------------------|----------------------------|
|      1 | Gujarat     | Uttar Gujarat Vij Company Limited                      | A+               |                       6.88 |
|      2 | Gujarat     | Madhya Gujarat Vij Company Limited                     | A+               |                      11.31 |
|      3 | Gujarat     | Dakshin Gujarat Vij Company Limited                    | A+               |                       6.22 |
|      4 | Gujarat     | Paschim Gujarat Vij Company Limited                    | A+               |                      19.22 |
|      5 | Haryana     | Dakshin Haryana Bijli Vitran Nigam Limited             | A+               |                      16.37 |
|      6 | Haryana     | Uttar Haryana Bijli Vitran Nigam Limited               | A                |                      20.68 |
|      7 | Punjab      | Punjab State Power Corporation Limited                 | A                |                      14.35 |
|      8 | Maharashtra | Maharashtra State Electricity Distribution Company Ltd | A                |                      19.92 |

*************