Due to lack of adequate investment on T&D works, the T&D losses have been consistently on higher side, and reached to the level of 32.86% in the year 2000-01.The reduction of these losses was essential to bring economic viability to the State Utilities.

As the T&D loss was not able to capture all the losses in the net work, concept of Aggregate Technical and Commercial (AT&C) loss was introduced. AT&C loss captures technical as well as commercial losses in the network and is a true indicator of total losses in the system.

High technical losses in the system are primarily due to inadequate investments over the years for system improvement works, which has resulted in unplanned extensions of the distribution lines, overloading of the system elements like transformers and conductors, and lack of adequate reactive power support.

The commercial losses are mainly due to low metering efficiency, theft & pilferages. This may be eliminated by improving metering efficiency, proper energy accounting & auditing and improved billing & collection efficiency. Fixing of accountability of the personnel / feeder managers may help considerably in reduction of AT&C loss.

With the initiative of the Government of India and of the States, the Accelerated Power Development & Reform Programme (APDRP) was launched in 2001, for the strengthening of Sub Transmission and Distribution network and reduction in AT&C losses.

The main objective of the programme was to bring Aggregate Technical & Commercial (AT&C) losses below 15% in five years in urban and in high-density areas. The programme, along with other initiatives of the Government of India and of the States, has led to reduction in the overall AT&C loss from 38.86% in 2001-02 to 34.54% in 2005-06. The commercial loss of the State Power Utilities reduced significantly during this period from Rs. 29331 Crore to Rs. 19546 Crore. The loss as percentage of turnover was reduced from 33% in 2000-01 to 16.60% in 2005-06.

The APDRP programme has been restructured by the Government of India, in order that reliable and verifiable baseline data of revenue and enegry in APDRP Project areas is attained over an IT plateform and that AT& C loss reduction is achieved on a sustained basis. The Restructured APDRP (R-APDRP) was launched by MoP, Gol in July 2008 as a central sector scheme for XI plan. The scheme comprises of two parts-Part-A & Part-B, Part-A of the scheme being dedicated to establishment of IT enabled system for achieving reliable & verifiable baseline data system in all towns with population greater than 30,000 as per 2001 census (10,000 for Special Category Status). Installation of SCADA/DMS for towns with population greater than 4 lakhs & annual input energy greater than 350MU is also envisaged under Part-A. 100% loan is provided under R-APDRP for Part-A projects & shall be converted to grant on completion and verification of same by Third Party independent evaluating agencies (TPIEA) being appointed by MoP. MoP, Gol has earmarked Rs. 10,000 Crores for R-APDRP Part-A.

Part-B of the scheme deals with regular Sub Transmission & Distribution system strengthening & upgradation projects.The focus for Part-B is on AT&C loss reduction on sustainable basis.25% loan is provided under Part-B projects and upto 50% of scheme cost is convertible to grant depending on extent of maintaining AT&C loss level at 15% level for five years. For special category states, 90% loan is provided by GOI for Part-b projects and entire GOI loan shall be converted to grant in five tranches depending on extent of maintaining AT&C loss level at 15% level for five years. MoP , Gol has earmarked sanctioning of schemes upto Rs. 40,000 Crores under R-APDRP Part-B. Of this, upto Rs. 20,000 Crore would be converted to grant depending on extent to which utilities reduce AT&C losses in project areas.

R-APDRP also has provision for Capacity Building of Utility personnel and development of franchises through Part-C of the scheme. Few pilot projects adopting innovations are also envisaged under Part-C.

UNDER R-APDRP - Part-A (IT enabled system) project worth Rs. 5348.34 Crs. For 1412 towns, 72 Part-A (SCADA) project's worth Rs. 1601.28 Crs. and 1244 Part-B projects worth Rs. 31139.71 Crs. have been sanctioned till 31.03.2014.

IT Implementing Agencies (ITIAs) have been appointed in 1398 towns for execution of part-A projects. 509 towns have been decalred as Go-live. SCADA Implementing Agencies (SIAs) have been apointed in 63 towns. Part-B projects have awarded/started implemented in 1049 Towns. So far Part-B works have been complted in 70 towns.