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MOSL: UTILITIES-The Prevailing ‘Discom’fort; Bihar DISCOMs: Reducing T&D losses imperative

UTILITIES: The Prevailing ‘Discom’fort; Bihar DISCOMs: Reducing T&D losses imperative

 

• Bihar is India's third most populous state and home to ~100m people. Over the past few years, increasing electricity connections to these residents have led to a spurt in power demand in the state. Volumes for Bihar's DISCOMs have risen at an 18% CAGR over FY15-19.
• A key enabler for rapid demand growth has been government initiatives such as 'Har Ghar Bijli' and 'Saubhagya'. Sale of power to domestic consumers has risen at a 30% CAGR over FY15-19.
• Profitability for the state's two DISCOMs - North Bihar Power Distribution Company (NBPDCL) and South Bihar Power Distribution Company (SBPDCL) -though remains elusive with estimated cash losses of INR40b over the previous two years. T&D losses at ~33% remain substantially higher than the AT&C target of 20-22% set under the UDAY scheme.
• In this report, we have consolidated and analyzed the operations and financials for Bihar's two DISCOMs based on the available tariff filings and annual statements.