ICRA-Crisil study exposes SEB woes

A joint study by ICRA and CRISIL on the performance of state electricity boards across India has identified Delhi as the best state in terms of power generation, with Andhra Pradesh at second position. Delhi was ranked sixth last year and AP was first.

Factors taken into consideration for the rating on a total score of 100 included, steps taken by state governments, the state electricity regulatory commission's performance, transmission and distribution losses, financial risks, and overall commercial viability.

The states in order of scores were Goa, Karnataka, Gujarat, Haryana, Punjab, Himachal Pradesh, Uttar Pradesh, Rajasthan, West Bengal, Tamil Nadu, Maharashtra, Uttaranchal, Kerala, Assam, Madhya Pradesh, Meghalaya, Orissa, Sikkim, Nagaland, Tripura, Chhattisgarh, Bihar, Manipur, Arunachal Pradesh, Jammu & Kashmir and Mizoram.

On the basis of generation parameters Karnataka, Uttaranchal and Rajasthan score higher than average on account of favourable availability and plant load factor (PLF) respectively.

Delhi, Haryana and Tripura scored low owing to poor state of plants and high manpower levels. West Bengal, Assam and Bihar had low scores on account of unfavourable PLF.

All states had poor 'energy billed on metered basis' parameter, with proportion of billing on metered basis less than 50 per cent of energy input into the system.

On the basis of risk analysis scores reflect the improving trend in receivable seen in case of most of the SEBs, improvement in power purchase and fuel creditors following securitisation of dues and progress in funding pension and gratuity liabilities.

Despite progress, the coverage of costs through revenue was average for most states except Goa. A key parameter that made the difference in the scores was actual track record of debt servicing. Delhi, AP, Goa, Karnataka, Gujarat and TN have earned full score.

In terms of commercial viability, Goa scored in 2002-03 and made cash profits for the last two years but its sustainability remains to be seen. Delhi and West Bengal scored high as well. States like West Bengal, Andhra Pradesh , Uttaranchal, Gujarat, Goa and Uttar Pradesh made some progress in terms of reducing cash losses during 2002-03.

Maharashtra has shown a more consistent improvement with all the scores on the subparameters being above average. Base year computations for cash losses in FY 2001 were impacted by 'Dabhol'.

The states reduced their cash losses since the last ranking exercise. The reductions needed to be accelerated to make a material difference in the sector.

The report states Delhi, Goa, Gujarat , Karnataka and UP scored higher than other states on account of good structural adjustment support provided to the utilities along with above average subsidy payment track-record and satisfactory progress against targets laid down in MoU / MoA with the central ministry of power (MoP).

On the of SERC parameters, Delhi, Andhra Pradesh, Uttar Pradesh, Haryana , Karnataka and Tamil Nadu scored well on account of developed tariff philosophies leading to timely release and implementation of tariff orders. Many SERC have provided operational codes and guidelines in addition to the annual tariffs and subsidy payments.

Scores for states like Gujarat, Maharashtra and Himachal Pradesh, despite functional SERCs, were affected because of the delay on the part of utilities to file the tariff petition.

West Bengal did badly as the WBERC tariff order led to litigation and delay in releasing subsequent orders.