CHANDIGARH: There is need a standardized loss calculation methodology which transparently accounts for energy as handled in the system as the losses could vary by up to 4% depending merely on the methodology used for calculation , claimed Ann Josey and Mokshda Kaul researchers with Prayas (Energy Group).

An increase in Aggregate Technical and Commercial (AT&C) loss implies an increase in costs and consequently consumer tariffs. Analysis of six large states in India show that a 1%increase in Transmission and Distribution (T&D) loss results in an Rs.200 to Rs.400 crore annual increase in costs for the electricity distribution companies in each state.

Loss assessment is affected by two long-standing metering challenges in the sector. Of these, one relates to the large presence of unmetered users whose consumption is not measured but estimated based on assumptions. The second is the lack of accurate metering infrastructure not only in the distribution network but also the transmission system.

T&D loss is calculated as the difference between input in the T&D network and sales to consumers. AT&C loss is calculated as the difference between the energy input in the distribution network and revenue collected for the same.

Driven by rising tariffs, many industrial and commercial enterprises have been meeting their demand through alternate supply options such as open access or captive generators. This demand is already more than 20% of the total sales in many states and will continue to grow. Even though these consumers use the network, the T&D loss in the network is typically estimated without accounting for such demand. This treatment overestimates T&D loss by 2 to 3%. However, it does not change the AT&C loss calculated as this metric focuses only on the inputs and losses attributable to the utility demand.

Franchisees are appointed to manage billing, revenue collection and capital expenditure in high loss pockets and a franchisee is typically treated as a single consumer drawing power from the state transmission network. This assumption leads to an under-estimation of T&D as well as AT&C loss by about 2 %.

The purchase from outside the state and the generation of renewable energy in the distribution network has been increasing in the recent past. Not accounting for this change, results in an over-estimation of T&D loss 0.03 to 0.12 % and an over-estimation of AT&C losses by 0.1 to 0.2 %.

AT&C loss is also dependant on the power utility's collection efficiency. For a utility which has had significant arrears in the past but has managed to increase collection for current and past receivables, there could even be a 10 % variation in estimation of collection efficiencies.