Lok Sabha Question No. 2594 (UNSTARRED), answered on 2022-12-22
Subject: Aggregate Technical and Commercial Losses
Ministry: POWER
Asked by: Vijayakumar (alias) Vijay Vasanth

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA UNSTARRED QUESTION NO.2594 ANSWERED ON 22.12.2022

## AGGREGATE TECHNICAL AND COMMERCIAL LOSSES

2594.  SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH:

Will the Minister of POWER be pleased to state:

(a) whether it is a fact that Aggregate Technical and Commercial (AT&C) losses of power distribution utilities declined to 17 per cent in 2021-22 from 22 per cent a year earlier;

(b) if so, the details thereof;

(c) whether it is also true that the said reduction in AT&C losses helped to improve the finances of utilities to maintain the system and buy power as per requirement and providing benefit to the consumers and if so, the details thereof;

(d) whether it is also true that the Government took a number of steps to improve the performance of power distribution utilities and if so, the details thereof;

(e) whether  it  is  a  fact  that  the  Government  has  taken  a  decision  that  any  future assistance  to  strengthen  distribution  systems  will  be  available  to  a  loss-making discoms only if it undertakes to bring AT&C losses gap down to specified levels within the specific time-frame and if so, the details thereof;

(f) the details of the Discoms that made losses during the year 2021-22, State/UTwise; and

(g) the steps taken by the Discoms to realize their outstanding dues from all clients?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI R.K. SINGH)

(a) & (b) : The preliminary analysis of data for FY 2022 of 56 DISCOMs contributing to more  than  96%  of  input  energy,  indicates  that  the  AT&C  losses  of  DISCOMs  have declined to ~17% in FY 2022 from ~22% in FY 2021.

(c) : The AT&C Loss is one of the key indicators of DISCOM's performance. The losses  directly  impact  the  cash  flow  position  of  DISCOMs  and  further  worsen  their financial  position.  High  losses  force  the  Discoms  to  supply  costly  electricity  to consumers. Reduction in AT&C losses improves the finances of the utilities, which will enable  them  to  better  maintain  the  system  and  buy  power  as  per  requirements; benefitting the consumers.

.........2.

(d) : Government of India have been implementing various performance linked and result oriented schemes, with the objective to have a financially secure, viable and sustainable power  sector (distribution segment  in particular). Various initiatives undertaken by Ministry of Power (MoP) includes Revamped Distribution Sector Scheme (RDSS), Electricity (Late Payment Surcharge and Related Matters) Rules 2022, Additional  Borrowing  space  of  0.5%  of  GSDP  to  the  States  linked  to  power  sector reforms, Corporate Governance Guidelines, Additional Prudential Norms for lending by Power  Finance  Corporation  (PFC)  Limited  and  Rural  Electrification  Corporation  (REC) Limited, based on the performance of the utilities, Liquidity Infusion Scheme (LIS) and PM  KUSUM  Scheme.  These  initiatives  have  been  designed  to  tackle  financial  and operational  issues  to  bring  in  the  desired  financial  discipline  in  Discoms  and  State Governments.

(e) : MoP  has  decided  that  any  future  assistance  under  any  scheme  for strengthening of the distribution system by the DISCOMs will be available to a DISCOM, which is making losses only if it  undertakes to bring its AT&C losses / ACS-ARR Gap down to specified levels, within a specific timeframe and gets their State Government's commitment to it. The RDSS lays down that funding under the scheme will be available only if the DISCOM commits to an agreed loss reduction trajectory. Other initiatives like Additional Borrowing space of 0.5% of GSDP to States linked to power sector reform; Additional  Prudential  Norms  for  lending  by  PFC  Limited  and  REC  Limited  also  have  a similar provision.

(f) : The final 'Report on Performance of Power Utilities' for the FY 2021-22 is awaited.

(g) : The RDSS envisages implementation of prepaid smart metering. This will ensure  timely  payment  of  electricity  dues.    Coverage  of  agricultural  consumers  has been left to the discretion of the States. Further, the pre-qualifying criteria of the RDSS, inter-alia,  include  timely  payment  of  subsidy  and  clearing  outstanding  Government Departments dues.

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