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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.
