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New Delhi: Aggregate technical and commercial (AT&C) losses of power distribution utilities declined to 17% in 2021-22 from 22% in the previous year, the Ministry of Power said in a statement.

“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," the statement reads.

In the last two years, the AT&C loss of the discoms of the country were hovering around 21-22%. The ministry has taken a number of measures to improve the performance of utilities, the statement said.

The ministry said that the 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 a reduction in the gap between the average cost of supply (ACS) and average realisable revenue (ARR).

“The ACS-ARR Gap (on a subsidy received basis, excluding regulatory income & UDAY grant) has declined from 0.69/kWh in FY2021 to Rs. 0.22/kWh in FY2022," the ministry added.

The decline of 5% in AT&C losses and 47 paise in the ACS-ARR Gap in one year is the result of a number of initiatives taken by the Ministry of Power.

On 4 September, 2021, the Ministry of Power revised the prudential norms of PFC and REC, the lending agencies for the power sector. Loss-making discoms will not be able to avail financing from the two lenders until they draw up an action plan for reducing the losses within a specific timeframe and get their state government’s commitment to it.

The ministry also decided that any future assistance under any scheme for strengthening the distribution system by discoms will be available to a loss-making discom only if the company undertakes to bring its AT&C losses / ACS-ARR gap down to specified levels within a specific timeframe and gets its state government commitment to it.

“The Revamped Distribution Sector Scheme (RDSS) lays down that funding under the scheme will be available only if the discom commits to an agreed loss reduction trajectory," it said.

Besides, the ministry has worked with distribution companies to provide the necessary finances under RDSS for undertaking the loss reduction measures.

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