Adani Electricity Mumbai, Noida Power, Gujarat discoms top govt ratings

Overall AT&C losses increase marginally, absolute cash gap decreased by 43% from FY23 to FY24: PFC report

Private power distribution companies (discoms) have once again pipped state-owned entities, with Adani Electricity Mumbai Ltd (AEML) in the lead followed by Noida Power Corporation Ltd (NPCL) in the discom ratings’ report of the Ministry of Power.

 

AEML has been ranked first for the third year in a row. 

 

Discoms of Gujarat were in the top five, as they have been since the inception of this rating exercise. Unlike past years, the report did not provide commentary on the financial metrics such as revenue generated and profit-loss of the discoms. It said the gap between the average cost of supply (ACS) and the average revenue realised (ARR) fell by 20 paise per unit. It was Rs 0.59/ kwh in FY23 and came down to Rs 0.39/ kwh in FY24. This led to a reduction in absolute cash gap to Rs 58,000 crore in FY24 from Rs 85,000 crore in FY23 for the discoms.

 

 

On the operational front, according to the report, 40 out of 63 utilities saw improvement in their aggregate technical & commercial (AT&C) losses, with 18 utilities recording a greater than 2 percentage point improvement. AT&C losses are the operational parameter for a discom.

 

“Grades have been upgraded for 15 discoms and 6 power departments and downgraded for 13 discoms from the previous year. Among 63 utilities covered in these ratings, 25 discoms and 9 power departments saw an ‘improving’ trend (more than 5 per cent increase) in scores from the previous year,” said the report prepared by Power Finance Corporation.

 

While several utilities registered improvement on the operational front, overall AT&C losses during the year grew from 15.3 per cent to 16.3 per cent.

 

They were driven by a 1.2 percentage points decrease in collection efficiency (metric of bill collection by discoms).

 

“Among the 63 rated utilities, collection efficiency was below the lower threshold (91 per cent for discoms and 90 per cent for power departments) for four utilities. Meanwhile, 22 utilities achieved collection efficiency at or above the upper threshold,” the report said.

 

Speaking at the launch of the report, Union Power Minister M L Khattar reiterated the need to find new fund streams for power utilities, such as listing profit making discoms or transmission companies on exchanges.

 

“States have been advised to list discoms on stock exchanges, as this will help boost the financial viability of the sector,” he said.

 

He added that the government has set a target to bring down AT&C losses to 10 per cent by 2030.