This note lays out the implications forthe financial sector and budget of the huge and increasinglosses of Indian distribution companies (DisComs) andpresents potential approaches to address the issue. It isdivided into two parts: part one is approach to financialsustainability of distribution business; and part two isinternational experience on coal imports and mitigation ofmarket risk. The most urgent need is to address the problemof financial distress of the utilities, while using thecrisis as leverage to implement regulatory and governancereforms that will be essential to the longer-termsustainability of any short-term actions agreed by the utilities.