Andhra's power distributors reduce cost-revenue gap

VIJAYAWADA: Andhra Pradesh power distribution companies (Discoms) have fared well in reducing the Average Cost of Supply-Average Revenue Realised (ACS-ARR) gap between 2015-16 and 2019-20, according to the latest statistics revealed by the Union Ministry of Power. The Discoms have brought down the gap from Rs 0.79 per kWh in 2015-16 to Rs 0.02 per kWh in 2019-20.

Although the cost of supply is just over the average revenue realised, the State has managed to narrow down the gap significantly even as neighbouring states like Telangana and Tamil Nadu, among others, saw deterioration. Telangana’s ACS-ARR gap increased from Rs 0.68 per kWh in 2015-16 to Rs 0.96 per kWh in  2019-20, while Tamil Nadu’s rose from Rs 0.67 per kWh to Rs 1.27 per kWh. The national average in the corresponding period improved from Rs 0.47 to Rs 0.28 per kWh, according to the Power Ministry’s July data. Both the State and the Centre have targeted to bring down the gap to zero by 2024-25.

Aggregate Technical and Commercial (AT and C) losses saw a marginal increase from 10.36 per cent in FY 16 to 10.77 per cent in FY20, but Andhra Pradesh continues to be in the top of the list of States with low losses. The national average also saw an improvement with the AT and C losses coming down to 21.83 per cent from 23.7 per cent in the same period. 

State officials attributed the improvement to cost optimisation in procurement, focus on green energy, strengthening of the transmission network and deployment of advanced technologies in operations and management. It may be recalled that the Centre, last year, introduced liquidity infusion programme as a part of which conditional financial assistance is provided to State Discoms, most of which are under financial stress.

Installation of prepaid/smart meters in various sectors, reducing the ACS-ARR gap, bringing down AT and C losses, DBT of subsidies and others are some of the pre-conditions to the release of Central funds. 
As of July 31, the Power Finance Corporation and the Rural Electrification Corporation have sanctioned Rs 8,370 crore to AP under the liquidity infusion scheme, out of which Rs 7,423 crore has been disbursed to the Discoms.