Delay in filing tariff petitions and high debt levels are among the key concerns for Tamil Nadu Generation and Distribution Corporation (Tangedco), according to the 7th Integrated Rating for the State Distribution Utilities for the financial year 2018 released by the Ministry of Power.
Tangedco’s net worth remains significantly negative at ₹44,357 crore, while debt stands at ₹1,01,294 crore, it said. The report pointed out that the utility’s dependence on tariff subsidy from the State government increased substantially.
The Ministry of Power had formulated an integrated rating methodology in July 2012 for evaluating the performance of State power distribution utilities on a range of parameters. The rating exercise is carried out on an annual basis and at present covers 41 distribution utilities spread across 22 States. The Ministry has mandated Power Finance Corporation (PFC) to coordinate the rating exercise and designated ICRA and CARE as the credit rating agencies.
Scores have been assigned on the basis of performance of the distribution utilities against various parameters. The operational and reform parameters namely Aggregate Technical and Commercial (AT&C) losses, efficiency of power purchase cost, digital payment facility etc. carry weightage of 52%. The financial parameters such as cost coverage ratio, payables, receivables, timely submission of audited accounts etc. carry weightage of 33%.
External parameters relating to regulatory environment and State government subsidy support have been assigned a weightage of 15%.
The report said the key strength of Tangedco is relatively low AT&C loss levels at 18.49%. Receivable days have remained consistently low and stood at 39 days.
Below average
However, Tangedco rating remained unchanged at B, with a score between 50 and 65, indicating a below average operational and financial performance capability.
Tariff orders for FY 2019 for 4 utilities — Tangedco, West Bengal State Electricity Distribution Company Limited, Kerala State Electricity Board Limited and Tripura State Electricity Corporation Limited — have not been issued, it said.
