India’s power distribution utilities post ₹2,701 cr. profit in FY 2024-25, Pg11

Key Highlights:

• Indian power distribution utilities reported a net profit of ₹2,701 crore in FY 2024-25.
• State-run DISCOMs reduced their losses by approximately 80% from FY 2023 to FY 2025.
• Aggregate Technical and Commercial (AT&C) losses decreased to 15.04% in FY 2024-25 from 22.62% in FY 2013-14.
• The difference between Average Cost of Supply (ACS) and Average Revenue Realised (ARR) narrowed to ₹0.06/kilowatt-hour in FY 2024-25.
• Outstanding dues to generating companies reduced by 96% due to the Electricity (Late Payment Surcharge) Rules.

Detailed Insights:

• The turnaround is attributed to improved performance across key indicators and measures to address concerns in the distribution sector.
• The Electricity Amendment Bill (2026), expected to be tabled in Parliament, is anticipated to further boost profitability.
• Reduction in AT&C losses indicates improved efficiency in addressing technical inefficiencies, theft, and billing issues.
• A narrower ACS-ARR gap signifies reduced operating losses for DISCOMs, enhancing their ability to recover costs.
• Implementation of the Late Payment Surcharge Rules has significantly improved payment cycles for distribution utilities.
• Payment cycles for distribution utilities have improved from 178 days in FY 2020-21 to 113 days in FY 2024-25.

Key Concepts Involved:

• DISCOMs: Companies or entities responsible for distributing electricity to end consumers.
• AT&C Losses: Losses incurred due to technical inefficiencies, theft, billing inefficiencies, and commercial factors.
• ACS-ARR Gap: The difference between the average cost of supplying power and the average revenue realized from it.