AT&C loss levels in various discoms remain higher in FY13:ICRA

Despite steps taken by various state discoms to reduce distribution losses, average aggregate technical and commercial (AT&C) loss levels have been higher at 27 per cent in FY13, a recent study by ICRA said.
According to the rating agency, improvement has been observed in distribution loss levels for discoms in 12 states during FY07-13, while a deterioration or limited progress in reducing loss levels has been seen in five states and in the remaining two states, loss levels have remained almost unchanged.
"Despite this improvement, the distribution losses remain relatively high in a majority of the states - with discoms in 10 states showing losses higher than 20 per cent loss in FY13. Average all India AT&C loss levels were in the range of 27 per cent for FY 2013," ICRA said in a statement.

This is significantly higher than what is targeted and points to a considerable scope for reduction in loss levels, it said.
Discoms which have seen a deterioration or limited progress in reducing loss levels are in the states of Uttar Pradesh, Jammu & Kashmir, Bihar, Chhattisgarh and Odisha - where the loss levels in FY13 remained significantly higher as compared with the national average, the report said.
State Electricity Regulatory Commissions (SERCs) in 11 of the 19 states under study have approved distribution loss trajectory till FY16.

"SERCs while approving tariff determination have stuck to pre-approved loss trajectory even though actual loss levels remained much higher and this in turn has led to disapproval of a significant revenue gaps as projected by utilities in tariff petition filings in many states. Even for discoms where such deviation is low, under-recovery in power purchase costs arise because of AT&C loss levels being higher than the approved loss levels," ICRA said.

The distribution segment is predominantly state-owned and the private-owned distribution utilities account for about 7-8 per cent of the energy demand in the country.
"As against the state-owned utilities, operational efficiency levels for most of the private owned distribution utilities have remained relatively better which is largely on account of favourable demographic profile with limited mix of agricultural consumption, implementation of adequate capex for strengthening of distribution network and better operational focus and practices followed," ICRA noted.