TS Discoms’ rankings slip in annual ratings for FY2018

Power distribution companies in Telangana have been asked to improve bill collection

Power distribution companies in Telangana have been asked to improve bill collection   | Photo Credit: File photo

MoP suggests better bill collection, suitable tariff revision, cost rationalisation

Bagging several performance-oriented awards in the recent years aside, the two power distribution companies (Discoms) in Telangana have fared badly in the annual integrated ratings given by the Ministry of Power for 2017-18 as they have recorded high power purchase costs and low cost coverage ratio.

While the Southern Discom of Telangana has been able to maintain its ‘B+’ rating of 2016-17 in 2017-18 too, the Northern Discom has slipped a step below by securing only ‘B’ rating in 2017-18 compared to the previous year, according to the report — Seventh Annual Integrated Ratings of State Power Distribution Utilities — released by the MoP recently.

Deterioration of over 10% in the aggregate technical and commercial losses, however, has been attributed to non-receipt of due subsidy.

The report prepared by Credit Analysis and Research Ltd (CARE) with the coordination of Power Finance Corporation (PFC) has pointed that both the Discoms have registered losses for the third year in a row and the cost coverage ratio of 0.76 and 0.72 in 2017-18 for Southern and Northern Discoms, respectively. Similarly, the average power purchase cost was also high at ₹5.35 per unit for the year, the report stated.

Collection delays

In spite of having “satisfactory” billing efficiency of around 89%, the two Discoms high collection and payable days, ranging from 107 to 225, during 2017-18. The report has further faulted the power distribution utilities for not practising automatic passing on of the increase in fuel costs to customers and also for not filing the tariff petition for 2019-20 yet.

Along with the grey-areas the Discoms, however, have scored some finer points in the ranking reports of professional risk opinion such as “satisfactory” power purchase planning with over 90% of power being purchased through long-term Power Purchase Agreements.

Subsidy dues

The report suggested the Discoms to focus on “reducing the technical and commercial losses, improving collection efficiency, reducing payable days, improving cost coverage through suitable tariff revision and cost rationalisation”, for scaling up their performance. In addition, timely receipt of subsidy due from State government and timely filing of tariff petitions would also help the Discoms in improving their performance.

Officials of the two Discoms refused to comment on the ratings for 2017-18 stating that they were on course of improving performance and said it was a continuous process adding that some of the improved parameters would be visible in the next rankings. A senior official unwilling to be quoted said: “In spite of subsidy receipts from the government, the Discoms’ losses are increasing due to lack of tariff revision in tune with the power purchase costs”.

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Printable version | Apr 2, 2020 12:07:48 AM |

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