Union Power Minister releases 9th Integrated Ratings of State Power Distribution utilities and Rankings

Source: PIB

What is the News?

The Union Minister of Power has released 9th Integrated Ratings for State Power Distribution Utilities.

About Integrated Ratings for State Power Distribution Utilities:

• The Ministry of Power had formulated an Integrated Rating exercise in 2012. It evaluates the performance of State Power Distribution utilities on a range of parameters covering operational, financial, regulatory and reform parameters.
• The rating exercise is carried out on an annual basis and presently covers 41 state distribution utilities spread across 22 states.
• State Power/ Energy Departments and private sector distribution utilities are however not covered under the integrated rating exercise
• Nodal Agencies: ICRA and CARE are the designated credit rating agencies that carry out this exercise.
• Co-ordinations agency: Power Finance Corporation(PFC) has been mandated to coordinate with the utilities, rating agencies & Ministry of Power(MoP) during the rating exercise.

Key Findings:

• The five state distribution utilities of Gujarat and Haryana have topped the Integrated Ratings for State Power Distribution Utilities.
• The losses of state-owned electricity distribution companies (discoms) have dropped by more than a third to ₹38,000 crores in FY20 from ₹61,360 crores in FY19.
• The gap between the cost of electricity bought (ACS, or average cost of supply) and supplied (ARR, or average realizable revenue) has also come down.

Scheme Mentioned in the Article:

About Reforms-based and Results-linked, Revamped Distribution Sector Scheme:

• The scheme aims to improve the operational efficiencies and financial sustainability of all State DISCOMs/ Power Department in this regard.
• The Scheme envisages providing financial assistance to DISCOMs for strengthening and modernizing the supply infrastructure.
• States may also access funds under the scheme for strengthening their Distribution systems.