Nearly 30% of All Power Distribution Firms Improve Rank in Annual Report

The Central government’s annual appraisal of power distribution companies’ (DISCOMs) financial and operational performance saw 21 entities improve their rank over the last year. Only one company — Indian Power Corporation – was downgraded.

The eleventh annual integrated ratings for the financial year (FY) 2022 released by the Ministry of Power assessed the performance of 71 DISCOMs and awarded ten entities with A+ ratings.

These included Adani Electricity Mumbai, Dakshin Gujarat Vij Company, Madhya Gujarat Vij Company, DNH Power Distribution Corporation, Uttar Gujarat Vij Company, Paschim Gujarat Vij Company, Uttar Haryana Bijli Vitran Nigam, Dakshin Haryana Bijli Vitran Nigam, Noida Power Company, and Tata Power Mumbai.

Fiscal deficit narrows

The fiscal deficit in India’s power distribution sector stood at ₹530 billion (~$6.5 billion) on a cash-adjusted basis. The losses in FY22 declined 61% year-over-year.

This was driven by a significant improvement in the Average Cost of Supply (ACS) – Average Realizable Revenue (ARR) gap, which captures the cash-adjusted gap per unit. The power distribution entities cut their losses sharply by 57% YoY to ₹0.40 (~$0.005) /kWh in FY22.

The ACS-ARR gap is the difference between the revenue and cost per kWh and is one of the critical performance parameters for power distribution companies. A wider gap means the DISCOMs are running losses.

DISCOMs from Rajasthan, Maharashtra, Karnataka, Madhya Pradesh, and West Bengal significantly improved their performance. Together, their absolute ACS-ARR reduced by about ₹430 billion (~$5.23 billion) since FY20.

Twelve utilities improved their ACS-ARR gap by more than ₹1 (~$0.012)/ kWh during FY20-FY22.

These include Jodhpur Vidyut Vitran Nigam, Gulbarga Electricity Supply Company, Meghalaya Power Distribution Corporation, Jaipur Vidyut Vitran Nigam, Mangalore Electricity Supply Company, Chamundeshwari Electricity Supply Corporation, Ajmer Vidyut Vitran Nigam, Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company, Uttarakhand Power Corporation, Bangalore Electricity Supply Company, Sikkim Power Department, and Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company

Andhra Pradesh

The two Andhra Pradesh DISCOMs were upgraded in FY22, as shown in the table.

APEPDCL has improved various financial parameters such as ACS-ARR Gap, profit before tax (PBT), tariff subsidy received, and AT&C losses. The utility also has high billing efficiency at 93.4%.

While APSPDCL has shown some improvements, PBT has declined, and debt has risen.


The four Gujarat DISCOMs retained the same rating for FY22. The rating remained unchanged at A+ for the four DISCOMs.

Karnataka DISCOMs saw the highest rating upgrades, with improvement for all five DISCOMs, as shown in the chart.

Madhya Pradesh

Madhya Pradesh DISCOMs also improved their rankings, as presented in the table. It was due to better financial parameters such as the ACS-ARR gap, PBT, tariff subsidy received, and AT&C losses. All the utilities have also improved their billing and collection efficiency.

The Maharashtra State Electricity Distribution Company’s (MSEDCL) rating rose from C- to B- due to better financial and operational performance.

All the Rajasthan DISCOMs have also seen improved financial parameters and lower AT&C losses. Further improved billing and collection efficiency led to higher rankings.

Tamil Nadu

The Tamil Nadu Generation and Distribution Corporation retained its rating due to improved financial metrics. However, the utility’s AT&C losses deteriorated due to billing inefficiency. The report said that TANGEDCO needed to reduce its debt levels.

The two Telangana DISCOMs retained their ranks in FY22 despite poor financial performance. The AT&C losses of both the DISCOMs deteriorated due to their collection inefficiency. PBT increased marginally while the tariff subsidy received remained constant.

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