The Aggregate Technical and Commercial (AT&C) losses of distribution companies (DISCOM) decreased to 15.41% in the financial year (FY) 2022-23 from 17% in FY 2021-22, the Ministry of Power highlighted in its year-end review.

The Ministry attributed the improvement to the various measures taken under the Revamped Distribution Sector Scheme (RDSS). The program was introduced to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs who achieve the basic minimum benchmarks and meet the pre-qualifying criteria.

The reduction in AT&C losses directly contributes to the improvement in the Average Cost of Supply (ACS) and the Average Revenue Realized (ARR) gap, ultimately benefiting the end consumers with quality supply.

The program aims to reduce the AT&C losses across the country to 12-15% by FY 2024-25 and the ACS-ARR gap to zero by FY 2024-25.

The RDSS program comes with an outlay of ₹3.04 trillion (~$36.50 billion) over five years – from FY 2021-22 to FY 2025-26. The outlay includes an estimated government budgetary support of ₹980 billion (~$11.77 billion).

The government-owned Power Finance Corporation has approved projects worth over ₹1.17 trillion (~$14.05 billion) for various state DISCOMs under the RDSS Program as of September 2023.

The Ministry said under RDSS’ prepaid smart metering intervention, 197.92 million prepaid smart meters, 5.22 million distribution transformer meters, and 188,491 feeder meters worth a total ₹1.3 trillion (~$15.61 billion) have been approved to date.

The prepaid smart meter program has an estimated outlay of ₹1.5 trillion (~$18.01 billion) with a government budgetary support of ₹230 billion (~$2.76 billion) and a target of installing 250 million prepaid smart meters.

Under the framework for sustainability, the AT&C loss reduction trajectory is to be approved by the state regulatory commissions for tariff determination per the trajectory agreed by the state and central government under any national program.

The Ministry stated that during 2023, 14,390 ckm of transmission lines, 61,591 MVA of transformation capacity, and 4,290 MW inter-regional transfer capacity have been added.

In December 2023, the Ministry of Power proposed regulating short-term and general network access for DISCOMs that fail to clear their dues even after two and a half months.