Friday, April 15, 2011

Components of AT&C losses - mystery behind the number

Ever wonder what it means by Aggregate Technical and Commercial (AT&C) losses in power sector? It is one number that affects all stakeholders of power chain directly including the end-consumers. If AT&C losses are higher, then your distribution utility or DISCOM would go ahead making a case to its state Electric Regulatory Commission (ERC) during its Aggregate Revenue Requirement (ARR) filing for new and increased tariff orders. It works with DISCOM making a case that it has procured power of 'X' amount, but have received only X-- amount on account of AT&C losses and now with increased demand and rising supply prices and make up its arrears, it needs to increase tariff for next year.

To understand better, what makes this AT&C number and who is responsible for it, it is important to understand its detailed breakup.

Components of ATC Losses (Source: From Y.S.Butola's presentation @ IIES)

From figure above, it should be clear that everything right from power procurement to distribution, to consumption, to metering, to billing and to collection goes under this ONE number AT&C losses under two broad categories Technical losses and Commercial losses.

  1. Technical losses: during power travel from generation source to your home via transmission and distribution network
  2. Commercial losses:
        - Unmetered power supply: meter faults or power theft
        - Incorrect billing: manipulated meter reading, incorrect/no billing
        - Poor collection enforcement
Now, it probably would not be hard to infer how different agencies share responsibility of this number depending on case in hand. If utility has to go for making a case for international loan to improve its infrastructure, it would have Technical losses inflated, and if would have to make top management presentation would inflate Commercial losses and put the blame on the end-consumers.

However one important thing to realise is that end-consumers also share responsibility of helping its utility deliver performance. Their co-operation and vigilance to keep network safe and unmanipulated will go long way towards creating power security for India.

Please share your comments with specific stats and numbers to further discuss on this topic.

Post by: Rahul Bagdia @ pManifold

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