Gujarat discoms lead the pack in annual rating

UP, Rajasthan laggards; subsidies and mounting losses cited for sick status

Of the 40 state-owned power distribution companies (discoms) that the power ministry audited for annual financial and operational performance, four discoms of Gujarat have topped the list, for the fourth year in a row.

According to the power ministry’s report, reviewed by Business Standard, no other discoms from any state have got an A+ rating, like the utilities of Gujarat. Paschim Gujarat Vij Company Limited, which has got A rating, shares the slot with electricity supply companies of Mangaluru, Bengaluru, Uttarakhand, Chamundeshwari (Karnataka) and Southern Power Distribution Company of Telangana. Among the laggards are the discoms of Uttar Pradesh, Rajasthan, Jharkhand, Tripura and Meghalaya.

Apart from ranking the discoms, the report also reviews the performance and cites reasons for the same, discoms-wise and overall inference for the power supply sector. For the discoms, the common thread of observation was the high level of aggregate technical and commercial (AT&C) losses owing to high distribution loss levels and moderate collection efficiency. This was accompanied with weak financial profile marked by high accumulated losses and high receivable and payable days.

Among the discoms that fared well, there was a significant improvement in AT&C loss levels in FY15 led by higher tariff realisation and lower cost of supply. Cost coverage ratio for 26 entities remained low due to substantial increase in expenses and non-cost reflective tariffs, says the report.

According to the report, tariff orders for FY16 for six utilities have not been issued. These include discoms of Kerala, Rajasthan, Tamil Nadu and Tripura. Tariff orders for Assam, Jharkhand, Maharashtra, Uttar Pradesh and West Bengal have been issued with significant delays.