Learning from experience

The Electricity Act aims at efficiency through competition and fair play via transparent policy and effective regulation to achieve the goal of “power for all”. The major provisions of the Act include de-licensing of generation and captive generation; de-licensing of rural areas' stand-alone generation and distribution; stringent provisions for prevention and elimination of theft of electricity; and the provisions for re-organisation and unbundling of state electricity boards (SEBs).

The average AT&C (aggregate technical and commercial) losses for utilities selling directly to consumers have reduced by 1.35% i.e. from 30.59% in the year 2006-07 to 29.24% in 2007-08. Among the regions, southern region continues to have the lowest AT&C loss of 20.10%. AT&C losses have shown a reduction in all the regions in 2007-08. Almost 30% of the electricity generated gets lost partly by way of technical loss in the transmission, sub-transmission and distribution systems but mainly as commercial losses because of non-metering, poor metering, damaged meters, malfunctioning of meters or by theft of electricity.

AT&C loss is basically the difference between energy input and energy for which revenue is realised after accounting for collection efficiency.

Various utilities have made attempts to reduce AT&C losses. Punjab was reported to have used low-cost techniques to reduce loss. The utility reduced loss significantly by putting the meter outside the premise or in the poles outside the premise. Delhi has also used various technical interventions which have led to a significant reduction in distribution losses. The experience of West Bengal has also been impressive. The Gujarat model of loss reduction also relied on technological interventions at macro and micro levels. The Jyoti Gram Yojana (JGY) was launched in Gujarat as an effort for ‘load management and regulation of agricultural consumption’.

Theft of electricity is the biggest menace in the commercial loss component of AT&C loss and should be tackled sternly. The Electricity Act, 2003, has been amended in 2007 to make the penal provisions for theft of electricity more stringent. Theft is now a cognizable and non-bailable offence and the police can investigate such an offence. Andhra Pradesh, Delhi, Karnataka, Rajasthan, UP and West Bengal have enacted anti-theft laws and many of them have set up special courts and special police stations.

The APDRP (Accelerated Power Development & Reform Programme) was launched in the Tenth Five-Year Plan with equal emphasis on system implementation and use of IT for energy audit and accounting. However, statistics indicate that utilities’ off-take of IT application in the Tenth Plan was meagre. So, the Abraham committee was constituted to make recommendations for the 11th Plan APDRP, now rechristened as R-APDRP. It aims at system improvement and use of IT applications in the distribution sector. The Restructured APDRP states exactly what the utilities need to do, what the Centre is giving the money for and what it wants the outcomes to be. If the utility meets the outcome in a defined period, the loan becomes a grant, if not; the loan has to be repaid. While both components were part of the earlier reforms programme also, power utilities mostly used central funding for system upgradation, without setting right the distribution cycle. Now, the Centre is willing to fund the entire cost of IT enablement of a utility, provided the outcomes are achieved.