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Gujarat power distribution companies rank best on key performance indicators, report says

According to the Ministry of Power report, of the five state distribution companies that received an A+ rating, four were from Gujarat and one from Haryana.

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New Delhi: Power distribution companies in Gujarat are among the best performers in terms of operational and financial performance in India, while discoms in neighbouring Rajasthan are among the worst performers, according to data released by the Ministry of Power.

In a report titled ‘Ranking & Ninth Annual Integrated Rating: State Distribution Utilities’, 41 power distribution companies spread across 22 states in India were ranked by two rating agencies — ICRA and CARE Ratings — for the financial year 2020-21.

According to the report, only five state distribution companies received an A+ rating. Among them, four were from Gujarat — Uttar, Madhya, Daskhin and Paschim Gujarat Vij Company Limited — and one from Haryana — Dakshin Haryana Bijli Vitaran Limited.

Jodhpur Vidyut Vitaran Limited in Rajasthan, Tamil Nadu Generation and Distribution Corporation, Tripura State Electricity Corporation Limited, Manipur State Power Distribution Company Limited and Jharkhand Bijli Vitaran Nigam Limited featured among the bottom five.

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How discoms were ranked

The state power distribution companies were ranked — from A+ (best performer) to C (worst performer) — based on three broad categories. The first category — operational efficiency and reforms — was given the highest weightage of 43 points. This category includes how much Aggregate Technical and Commercial (AT&C) losses a discom made, cost efficiency, and the price at which power was purchased.

The second category, Financial Operations, had a weightage of 42 points and ranked discoms on their financial health — cost coverage ratio, timely submission of audited accounts, receivables, payables, sustainability etc. A 15 point weightage was given to external parameters — regulatory environment and support from the state in the form of subsidies, etc.

Those who scored above 80 received A+ rating. Discoms who scored between 65 and 80 were ranked A. Companies who scored less than 35 but above 20 were given a C+ score and those who scored below 20 were ranked a C.

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Gujarat a consistent performer

Gujarat’s power discoms have been ranked among the top performers in the past too. In 2019, all four distributors in the state were ranked A+.

Comfortable financial situation and clarity on regulatory mechanisms were the reasons for Gujarat’s good performance, while Haryana’s low Aggregate Technical and Commercial (AT & C) losses were cited to be the reason for their success.

Three discoms — one each from Haryana, Punjab and Maharashtra — received an A rating.

Though Punjab State Corporation limited was given an A, high employee costs, heavy dependence on the state for subsidies, and high cost of purchase power remained key concerns for the state, the report said.

Worst performers

A total of 10 discoms were rated B+ for their moderate performance, six were rated B for below average performance. Nine companies received a C and eight discoms were ranked C+ for very low performance.

Rajasthan’s Jodhpur Vidyut Vitaran Limited ranks last among the worst performers. The discom, which distributes power in 10 districts of Rajasthan, suffered mainly because of high AT&C losses, low billing efficiency, low cost coverage, and not receiving subsidy on time.

The distribution company in the state capital Jaipur — the Jaipur Vidyut Vitran Limited — also received the same rating. In 2019, both these discoms were given a B rating, which means their performance has worsened in the last two years.

Of the 17 distribution companies that got either a C+ or C (low to very low performance), three were in Rajasthan and two each in Uttar Pradesh and Madhya Pradesh. One each was located in Andhra Pradesh, Assam, Bihar, Chhattisgarh, Jharkhand, Manipur, Meghalaya, Tamil Nadu, Telangana and Tripura

The report recommends efforts directed to reduce these losses and improve efficiency parameters. These include focussing on areas where AT & C losses are high and improve billing efficiency through technical and administrative steps.

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