Question

What is the typical effect of high Aggregate Technical and Commercial (AT&C) losses on the financial health of power distribution companies (DISCOMs)?

• A. Reduced operational efficiency leading to lower electricity prices for consumers
• B. Improved profitability due to subsidized power tariffs
• C. Increased revenue-cost gap and accumulated losses
• D. Enhanced investment in network infrastructure and modernization

Answer 1

Answer:

C. Increased revenue-cost gap and accumulated losses

• High AT&C losses mean a large amount of electricity is generated but not paid for, leading to a significant gap between the average cost of supply (ACS) and average revenue realized (ARR), causing financial stress and accumulated losses for DISCOMs.