Gap between Average Cost of Supply and Average Realizable Revenue declines from Rs. 0.69/kWh in FY2021 to Rs. 0.22/kWh in FY2022…

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Aggregate Technical and Commercial Loss (AT&C Loss) and ACS-ARR gap are key indicators of DISCOM performance. In the last two years, the AT&C loss of the DISCOMs of the country was hovering at 21-22%. Ministry of Power (MoP) instituted a number of measures to improve the performance of utilities. Preliminary analysis of data for FY2022 of 56 DISCOMs contributing to more than 96% of input energy, indicates that the AT&C losses of DISCOMs have declined significantly to ~17% in FY2022 from ~22% in FY2021.

Reduction in AT&C losses improves the finances of the utilities, which will enable them to better maintain the system and buy power as per requirements; benefitting the consumers. The reduction in AT&C losses has resulted in reduction in the gap between Average Cost of Supply (ACS) and Average Realizable Revenue (ARR). The ACS-ARR Gap (on subsidy received basis, excluding Regulatory Income & UDAY Grant) has declined.   The above improvement is a result of the concerted efforts of the MoP, the state governments as well as distribution companies to implement the reforms and adoption of best practices. As a result – the viability of the power system has improved. This was necessary because the demand for power has been growing and further investments will be necessary for the power sector to expand to meet the growing demand; and the investments will only come if the power sector remains viable.

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