Power players want cut in AT&C losses as 250 BU power supplied is unbilled

Suggest commercial orientation of discoms need of the hour

Around 900 billion units (BUs) of power are purchased annually across the country. However, only 650 BUs are billed, while the balance remains unbilled. Industry players say they are essentially aggregate technical and commercial (AT&C) losses, which are 14 per cent in better-managed states, while 30 per cent plus in other states.

They have made a strong case to further step up efforts to reduce these losses and tariff and cost rationalisation. Further, the government will have to promote privatisation through distribution franchisees and evolving the open access mechanism for competition-induced efficiencies.

“Technical losses cannot be eliminated, but can be reduced through capital investment, optimising transmission, distribution system design and efficient operation. Metering 100 per cent consumer supply, billing for the entire metered energy and preventing theft are the basic means of reducing commercial losses. Commercial losses of some quantum are a fact of life the world over, in spite of strong vigilance enforcement. In our opinion, huge efforts are needed to minimise the commercial losses,” NTPC’s senior official told Business Standard.

Association of Power Producers director general Ashok Khurana said the difference between average cost of service and average net collection per unit is increasing progressively - increasing the "cash deficit" in the sector. ''Reforming distribution segment is neither a function of technology nor finances, it is a function of sustained political will . Sustained political will coupled with technology support can turn sector positive in 3-5 years , depending on baseline data,'' he noted.

BSES spokesman said Delhi has witnessed the most substantial reduction in AT & C loss figures in last 12 years in India. At the time of privatisation (2002), losses in Delhi were in excess of 55%. ''Due to massive crackdown on power theft, active use of smart analytics and significant improvements in the distribution network, AT & C losses in the city are around 15% now.'' However, he called for an active support of law enforcing agencies to curb power theft.

In Mumbai, the Reliance Infrastructure distribution has loss levels of 9% which in non slum areas is 6%.

CRISIL Ratings senior director Sudip Sural said that commercial orientation of discoms is dire need of the hour.''Distribution loss is due to old infrastructure, lack of repairs and poor line availability. Decrepit infrastructure and collection losses are the structural challenges. The inherent inefficiencies of the system evidenced in AT&C losses of around 25.4% need to be addressed,'' he noted.