Gujarat tops power ministry Discom ranking: Rajasthan ranks lowest among 41 entities

Coal Insights Bureau

All the four power distribution companies in Gujarat — Uttar Gujarat Vij Company Ltd. (UGVCL), Madhya Gujarat Vij Company Ltd. (MGVCL), Dakshin Gujarat Vij Company Ltd. (DGVCL) and Paschim Gujarat Vij Company Ltd. (PGVCL) — have secured first four positions with highest rating of A+ in the Ninth Annual Integrated Rating conducted by Union Ministry of Power.

All the Gujarat’s Discoms have secured A+ rating.

Discoms of Haryana - Dakshin Haryana Bijli Vitran Nigam Limited and Uttar Haryana Bijli Vitran Nigam Limited – have secured 5th and 6th ranks with ratings of A+ and A respectively.

Discoms of Punjab, Maharashtra, Mangalore and West Madhya Pradesh have been ranked 7th to 10th in that order.

In the annual rating of state Discoms, West Bengal State Electricity Distribution Company Ltd (WBSEDC) has been ranked 17th with a rating of B+.

Jodhpur Vidyut Vitran Nigam Ltd has been ranked lowest with C rating.

The ratings are conducted for evaluating performance of state power distribution utilities based on a range of parameters viz. AT&C losses, cost efficiency, financial performance, sustainability, regulatory, reforms, and government support.

The Integrated Rating exercise is carried out on an annual basis since 2012 as per the methodology approved by Ministry of Power.

The exercise covers 41 states distribution utilities spread across 22 states.

Rating agencies ICRA and CARE are the designated credit rating agencies.

Power Ministry mandated Power Finance Corporation (PFC) to co-ordinate with the utilities, rating agencies & MoP during the rating exercise.

“The Indian Power sector will benefit from a fair and accurate assessment of the true position of the distribution sector which in turn will help in assessing and improving its performance,” Minister of Power, New and Renewable Energy, R K Singh said while releasing the ratings.

A strong and efficient power distribution sector is the key to the performance and viability of the power sector and the state power sector entities play a pivotal role in power distribution in India and the Central government is supporting the states for strengthening the distribution system necessary for providing 24x7 power supply to all households, he said.

A Reforms-based and Results-linked, Revamped Distribution Sector Scheme has recently been approved by the Cabinet Committee on Economic Affairs with an aim to improve the operational efficiencies and financial sustainability of all State Discoms/ power department.

The scheme envisages providing financial assistance to Discoms for strengthening and modernizing the supply infrastructure. States may access funds under the scheme for strengthening their Distribution systems. Where the Distribution Companies are in losses, the States will be able to draw funds under the scheme only if they institute measures to reduce these losses. Therefore, the funding is reforms linked.

There has already been improvement in the performance of Discoms and this scheme will take the improvements further, the minster added.

Rating methodology

The objective of the integrated rating is to rate all utilities in power distribution sector on the basis of their performance and their ability to sustain the performance level.

The methodology adopted attempts to objectively adjudge the performance of state distribution utilities against various parameters broadly classified under

i) Operational & Reform parameters

ii) External Parameters

iii) Financial parameters.