Economy

Power Distribution Reforms and AT&C Losses

GS3 Infrastructure: EnergyPrelims and Mains

In the news since 6 January 2026

Why in news
On 6 January 2026 the Ministry of Power said provisional FY 2024-25 data show a turnaround in DISCOM health. AT&C losses fell to 16.16% and utilities posted their first-ever profit.
What it is
AT&C losses measure the share of energy put into the distribution system that is not billed or not paid for. They combine technical line losses with billing and collection losses. The ACS–ARR gap is the difference between a utility's average cost of supply and its average revenue realised per unit, and shows how far tariffs cover costs.
AT&C losses
AT&C losses fell from 22.62% in FY14 to 16.16% in FY25 (provisional).
ACS–ARR gap
The gap between average cost of supply and average revenue realised narrowed from ₹0.78/kWh in FY14 to ₹0.11/kWh in FY25.
First profit
DISCOMs and power departments recorded a positive PAT of ₹858 crore for the first time, against a loss of ₹67,962 crore in FY14.
Late Payment Surcharge Rules
Dues to generating companies fell 96%, from ₹1,39,947 crore in 2022 to ₹5,747 crore by December 2025.
Legacy burden
DISCOMs still carry ₹6.39 lakh crore in accumulated losses and ₹7.18 lakh crore in debt, with about 80% concentrated in eight major states.

Don’t confuse with AT&C loss vs technical loss: Technical loss is energy lost in lines and transformers. AT&C loss also includes billing inefficiency and unpaid revenue.

Don’t confuse with ACS–ARR gap vs AT&C loss: The ACS–ARR gap is a money gap per unit between cost and revenue. AT&C loss is a percentage of energy not paid for.

Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.

No practice question for this one; the card may still help an answer. Why: Lasting topic on power sector finances with data. AT&C loss, ACS-ARR gap and DISCOM profit are fresh numbers, but routine data rarely reaches Prelims or Mains.

Worth revising until Prelims 2027: most news questions come within two years of the event.

Each time it was in the news

  1. 6 January 2026

    On 6 January 2026 the Ministry of Power said provisional FY 2024-25 data show a turnaround in DISCOM health. AT&C losses fell to 16.16% and utilities posted their first-ever profit.