Operational challanges faced by DISCOMS : Increasing AT&C losses

Electricity distribution companies (DISCOMS) play a crucial role in the power sector as they are responsible for delivering electricity to end consumers. However, there is a significant variation in the operational performance of DISCOMS in different states in India. This variation can be attributed to several factors, including state-specific policies, regulations, and governance structures.

According to a report by the Ministry of Power, the average Aggregate Technical and Commercial (AT&C) losses of DISCOMS in India stood at 23.43% in 2018-19. However, the performance varied significantly across states, with some states recording much higher losses than others. For instance, the highest AT&C losses were recorded in Jammu & Kashmir (53.81%), followed by Bihar (45.70%) and Uttar Pradesh (43.50%). On the other hand, some states like Gujarat (8.11%) and Maharashtra (11.05%) recorded much lower losses.

One of the main reasons for the variation in DISCOM performance is the difference in the state-specific policies and regulations. For instance, some states like Gujarat and Maharashtra have implemented several reforms in the power sector, including privatization of distribution, separation of carriage and content, and promotion of renewable energy. These reforms have helped improve the operational efficiency of DISCOMS in these states. On the other hand, states like Jammu & Kashmir and Bihar have been slower in implementing reforms, which has resulted in poor DISCOM performance.

Another factor contributing to the variation in DISCOM performance is the difference in the governance structures across states. In some states, the DISCOMS are directly controlled by the state government, while in others, they operate as private companies. States like Gujarat and Maharashtra have implemented a decentralized governance structure where DISCOMS are controlled by local bodies, which has resulted in better performance. In contrast, states like Jammu & Kashmir and Bihar have a centralized governance structure, which has resulted in poor performance.

Moreover, there are several technical challenges faced by DISCOMS, including high line losses, inadequate meter penetration, and underinvestment in infrastructure. States with high agricultural consumption also face challenges related to subsidies, cross-subsidies, and non-cost reflective tariffs. To overcome these challenges, DISCOMS need to adopt innovative solutions like smart grids, automated meter reading, and demand-side management.

In conclusion, the operational performance of DISCOMS in India varies significantly across states. While some states have recorded significant improvements in performance due to policy reforms and efficient governance structures, others have been slower in implementing reforms and continue to struggle with operational inefficiencies. To improve the performance of DISCOMS in India, it is essential to adopt a holistic approach that addresses the technical, policy, and governance challenges faced by the sector.

State Level Performance of DISCOMS in India (2018-19)