Reforms have led to increase in power supply and reduction in power distribution losses and losses of discoms: Union Power and New & Renewable Energy Minister – EQ

In Short : Reforms can include measures such as improving infrastructure, implementing technology solutions, reducing technical and commercial losses, promoting renewable energy integration, and enhancing governance and financial management within discoms.

In Detail : The Union Minister for Power and New & Renewable Energy has informed that as a result of the reform measures undertaken by Government of India, the Aggregate Technical & Commercial (AT&C) losses which were 25.72% in FY 2014-15 have come down to 15.41% (provisional) in FY 2022-23. As a result of the measures taken, the availability of power supply in rural areas has increased from 12.5 Hours in 2015 to 20.6 Hours in 2023. The power supply in urban areas has increased to 23.78 Hours in 2023.

This reduction in losses in the distribution sector is as a result of a number of reforms and measures taken by the Government which include:

(i) Putting in place Rules to ensure payment for any subsidy declared by Government in time.

(ii) Ensuring that the tariffs are up to date.

(iii) Reducing the Legacy dues of GENCOs, under Late Payment Surcharge Rules, which have come down substantially from around Rs. 1.40 lakh Cr. to around 0.52 lakh Cr.

(iv) Ensuring that the GENCOs are paid on time.

(v) Ensuring Energy Accounting and Energy Audit.

(vi) Putting in place revised Prudential Norms providing that no DISCOM or GENCO of a State Government will be able to get loans from PFC / REC if the DISCOM is making a loss, unless the DISCOM, with the approval of the State Government, works out a plan for loss reduction and files it with the Central Government, and adheres to that loss reduction trajectories.

(vii) Putting in place an incentive of an additional borrowing space of 0.5% of GSDP if the DISCOM puts in place loss reduction measures.

(viii) The distribution system has been strengthened with an expenditure of 1.85 lac crore adding 2927 new sub-stations and upgrading 3965 existing sub-stations. 6,92,200 Distribution Transformers have been installed, Feeder separation of 1,13,938 Circuit Kilometer (CKm) has been done and 8.5 Lakh Circuit Kilometer (Ckm) of HT and LT lines have been added/changed, covered wire in high loss areas were provided, works like Gas insulated substation, underground cabling, aerial bunched cable etc. were taken up. Further, Government of India has approved Revamped Distribution Sector Scheme (RDSS) on 30.06.2021 with an outlay of Rs. 3,03,758 crores and Gross Budgetary Support of Rs. 97,631 crores over a period of five years from FY 2021-22 to FY 2025-26. Under RDSS, DPRs of Loss Reduction works having total outlay of Rs. 1,21,778 Crores (GBS: Rs. 77,920 Cr) have been sanctioned till date.

(ix) Providing that loss making DISCOMs will not be able to draw funds under any Power Sector Scheme of GoI unless they put in place measures for loss reduction.

As per the ‘Report on Performance of Power Utilities’ published annually by Power Finance Corporation Ltd. (PFC), Financial Losses of distribution utilities have also come down from Rs. 46,521 crore in FY 2020-21 to Rs. 31,026 crore in FY 2021-22. The State-wise and Utility-wise details are given below.

State-wise and utility-wise details of Profit / (Loss) on accrual basis (PAT) (Rs. crore)

This information has been given by the Union Minister for Power and New & Renewable Energy Shri R. K. Singh, in a written reply to a question, in Rajya Sabha on December 19, 2023.