Working Paper on Good Practices Shaping the Electricity Distribution Sector in India

Working Paper on Good Practices Shaping the Electricity Distribution Sector in India
Working Paper on Good Practices Shaping the Electricity Distribution Sector in India

The electricity distribution sector plays a critical role in the power value chain in delivering reliable, affordable and cleaner electricity. The performance of DISCOMs is best understood through a combined evaluation of operational efficiency, financial sustainability and service delivery. However, a look at the decade between 2014-15 and 2024-25 reveals a complex narrative.

On one hand, national performance indicators show significant progress: Aggregate Technical & Commercial (AT&C) losses declined from 23.98 per cent to 15.05 per cent and the ACS-ARR gap (the difference between the cost of supply and revenue realised) narrowed from ₹0.58/kWh to just ₹0.06/kWh. These improvements stem from smarter operational practices, targeted technology interventions, strengthened regulatory practices and a more strategic approach to renewable energy procurement.

However, this operational progress contrasts with a deepening financial strain. During the same period, the sector’s overall financial burden increased nearly twofold.

Together, these reforms reflect a maturing regulatory ecosystem – one that is increasingly innovation-driven, consumer-focused and aligned with the evolving needs of a cleaner and more flexible power system.

With this background, this paper attempts to document such good practices adopted by different DISCOMs across the five key thematic areas. By highlighting these practices, this paper aims to demonstrate replicable pathways for improvement and provide practical insights for DISCOMs to learn from peers and progressively improve their performances.

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