DISCOMs AT&C losses drop by 1% y-o-y to 15.4% in FY2022-23: Govt report

New Delhi: Power distribution companies (DISCOMs) saw an improvement of 1 percentage point in AT&C (Aggregate Technical & Commercial) losses as the figure declined from 16.2 percent in FY2021-22 to 15.4 percent in FY2022-23, according to a rating report unveiled by Power Minister RK Singh on Monday. The AT&C losses were at 21.2 percent in FY2020-21. At least 43 out of 67 utilities saw an improvement in their AT&C losses, with 13 utilities recording a greater than five percent improvement — Ladakh PD, MSPDCL, PuVVNL, MVVNL, TPCODL, TPWODL, Mizoram PD, TCED, TPNODL, SBPDCL, DVVNL, NBPDCL and APSPDCL, showed the 12th Edition of Integrated Rating of Discoms.

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Driven by replacement of defective meters, improved vigilance in the prevention of theft and segregation of agriculture feeders, billing efficiency improved to 87 percent in FY23 as opposed to 86.1 percent in FY22. Collection efficiency, which improved from 92.9 percent in FY2020-21 to 97.3 percent in FY2021-22, remained at the same figure.

14 DISCOMs get A+ rating

Around 14 out of 52 distribution companies received A+ rating. The 12th edition, which rates the performance of 53 electricity distribution utilities, gave 12 utilities the highest ranking of A+. In addition, two private utilities, TPNODL (Odisha) and DNHDDPDCL (Dadar, Nagar & Haveli, Daman & Diu) too have received A+ rating; however, they have not been included in the main ranking list since they have not completed three full years of operations.

The top five positions go to Adani Electricity Mumbai Ltd (AEML) of Maharashtra at first position, Torrent Power Surat of Gujarat at second position, Torrent Power Ahmedabad of Gujarat at third position, followed by Gujarat’s state power utilities Dakshin Gujarat Vij Company Limited (DGVCL) and Uttar Gujarat Vij Company Limited (UGVCL) at fourth and fifth positions, respectively. It must be noted that no discom has received the lowest rating of D.

Subsidy disbursals by state govts crossed 100% for 2nd consecutive year

The state governments continued to disburse 100 percent of tariff subsidy booked in FY23, with some also clearing part of past arrears. Among the 24 states providing tariff subsidies to consumers, 21 states disbursed 100 percent or more of the booked amounts. On an aggregate national level, state governments disbursed 108 percent of the tariff subsidy booked during the year.

Some state governments also supported financial losses of discoms through subsidy grants (primarily Tamil Nadu, Telangana, Andhra Pradesh, Bihar, Rajasthan and Uttar Pradesh). The total amount of such grants disbursed during FY23 was over Rs 43,600 crore vs Rs 23,200 crore in FY22. This improvement helped increase the National ARR by 14 paise per unit, the report said.

Late Payment Surcharge Rules drove reduction in payables to generation and transmission companies. Days Payable reduced to 126 days and Days Receivable also reduced to 119 days. Average power purchase cost increased by 71 paise/kWh during FY23, driven by 8 percent growth in power demand, more expensive coal imports and higher exchange prices especially during summers.

ACS-ARR gap increases to 55 paise/kWh in FY23

ACS-ARR gap, the cash-adjusted gap per unit energy, increased to 55 paise/kWh in FY23 due to purchase cost not being passed on fully to consumers as thermal power plants continue to import coal for blending. “Consequent;y, ACS-ARR Gap widened by 22 paise per unit, from 33 paise in FY22 to 55 paise in FY23 pushing the absolute cash gap to over INR 79,000 crore,” said the report.

Addressing the power sector stakeholders at the release event held at Shram Shakti Bhawan, New Delhi, on Monday, the Union Power and New & Renewable Energy Minister RK Singh congratulated the DISCOMs for overall improvement in their performance but flagged some states which are otherwise considered developed but have received poor ratings for their DISCOMs.

Noting that some states which were not performing well have now started performing well, Singh also said, “However, one of the surprising things we have noticed is that some states which are regarded as developed or fast-developing have shown lower ratings for their discoms. This is critical. Unless and until our power sector is viable, we cannot grow since then, we will not be able to buy power to distribute to our people, which would in turn result in loadshedding and deindustrialisation.”

The minister observed that AT&C losses of discoms have come down and that they have been on a downward trajectory. “The billing efficiency has gone up and the collection efficiency was already high. Our motive behind implementing smart prepaid meters is to increase these efficiencies to 100 percent, which will also ensure that the AT&C losses of discoms come down to single-digit.”

Govt persuading DISCOMs to enter into long-term PPAs: RK Singh

The Power Minister noted that one of the reasons for increase in power prices is that many discoms have not tied up resources for long-term power supply, making them dependent on short-term power purchases which is naturally higher than long-term prices. “This is one thing we are persuading the discoms, to enter into long-term PPAs for at least 85% of their electricity requirement. We have laid down Resource Adequacy Rules which stipulate that discoms have to tie up power to meet the needs of the areas they serve. We have also laid down rules which specify penalties for gratuitous loadshedding. We have also laid consumer grievance redressal forums,” he said.

The Power Minister informed that the power demand has been growing up at 9 percent in the past 2-3 years and will continue to keep growing and that we are meeting that demand. “The power sector overall has become much more viable and has started attracting investment in all segments of the sector. Outstanding dues of state gencos have come down and dues of other gencos are fully paid. We will work out ways and means of ensuring that dues of state gencos too get paid on time. Share prices of all companies of public and private sectors in the power sector have gone up by 2-3 times and net value has gone up by 4-5 times. The power sector is the sector to invest in, since we have made the system viable,” said the minister.

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