The Central government’s annual appraisal of power distribution companies’ (DISCOMs) financial and operational performance saw 21 entities improve their rating 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.

Eastern Power Distribution Company of Andhra Pradesh (APEPDCL) sold 23,159 MU, generating revenue of ₹160.62 billion (~$1.96 billion). APEPDCL’s net profit for FY22 was ₹3.97 billion (~$48.5 million).

APEPDCL’s ACS-ARR gap improved to ₹-0.08 (~-$0.00098)/ kWh from ₹1.4 (~$0.017)/ kWh YoY.

AT&C losses improved to 7.8% from 20.9% YoY due to an improvement in collection efficiency of 98.7% from 84.8% YoY.

APEPDCL supplies power to 6,772,785 customers, 9.65% are in the C&I segment.

Southern Power Distribution Company of Andhra Pradesh (APSPDCL) sold 32,557 MU, generating revenue of ₹197.34 billion (~$2.41 billion). It incurred a net loss of ₹20.54 billion (~$250.91 million) for FY22.

APSPDCL’s ACS-ARR gap improved to ₹0.96 (~$0.012)/ kWh from ₹1.55 (~$0.019)/ kWh YoY.

AT&C losses improved to 13.6% from 38.7% YoY due to an improvement in collection efficiency of 94.2% from 66.8% YoY.

APSPDCL supplies power to 6,795,747 customers, 8.46% are in the C&I segment.

Gujarat

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

Dakshin Gujarat Vij Company (DGVCL) sold 24,748 MU, generating revenue of ₹173.96 billion (~$2.1 billion). PGVCL’s net profit for FY22 was ₹950 million (~$11.5 million).

DGVCL’s ACS-ARR gap deteriorated to ₹0.07 (~$0.00085)/ kWh from ₹-0.25 (~-$0.0030)/ kWh YoY.

AT&C losses improved to 4.8% from 7.4% YoY due to an improvement in billing efficiency of 97% from 92.6% YoY.

DGVCL supplies power to 3,512,052 customers, 14.68% are in the C&I segment.

Uttar Gujarat Vij Company (UGVCL) sold 26,157 MU, generating revenue of ₹156.87 billion (~$1.9 billion). UGVCL’s net profit for FY22 was ₹780 million (~$9.5 million).

UGVCL’s ACS-ARR gap deteriorated significantly to ₹-0.01 (~-$0.00012)/ kWh from ₹-0.23 (~$0.0028)/ kWh YoY.

AT&C losses improved to 6.7% from 6.8% YoY due to its billing efficiency currently at 93.9%.

UGVCL supplies power to 3,936,893 customers, 12.3% of who are in the C&I segment.

Madhya Gujarat Vij Company (MGVCL) sold 12,209 MU, generating revenue of ₹79.92 billion (~$973.6 million). MGVCL’s net profit for FY22 was ₹1.03 billion (~$12.5 million).

MGVCL’s ACS-ARR gap deteriorated marginally to ₹-0.05 (~-$0.00061)/ kWh from ₹-0.13 (~$0.0016)/ kWh YoY.

AT&C losses improved to 8.7% from 10% YoY– driven by an improvement in billing efficiency at 92.3% from 90% YoY.

MGVCL supplies power to 3,409,802 customers, 11.51% of whom are C&I consumers.

Paschim Gujarat Vij Company (PGVCL) sold 32,213 MU, generating revenue of ₹211.11 billion (~$2.5 billion). PGVCL’s net profit for FY22 was ₹970 million (~$11.8 million).

PGVCL’s ACS-ARR gap improved to ₹-0.22 (~-$0.0027)/ kWh from ₹-0.04 (~-$0.00049)/ kWh YoY.

AT&C losses improved to 16.7% from 17.9% YoY due to improvement in billing efficiency of 83.6% from 82.1% YoY.

PGVCL supplies power to 6,385,410 customers. C&I consumers constitute 12.09% of total customers.

Karnataka

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

Bangalore Electricity Supply Company (BESCOM) sold 26,685 MU, generating revenue of ₹229.06 billion (~$2.79 billion). BESCOM’s net profit for FY22 was ₹970 million (~$11.84 million).

BESCOM’s ACS-ARR gap improved to ₹-0.09 (~-$0.0011)/ kWh from ₹0.99 (~-$0.012)/ kWh YoY.

AT&C losses improved to 11.2% from 15.9% YoY due to improvement in collection efficiency of 100% from 95.2% YoY.

BESCOM supplies power to 13,328,295 customers. C&I consumers constitute 11.6% of total customers.

Mangalore Electricity Supply Company (MESCOM) sold 5,169 MU, generating revenue of ₹40.78 billion (~$498.34 million). MESCOM’s net profit for FY22 was ₹330 million (~$4.03 million).

MESCOM’s ACS-ARR gap improved to ₹-1.52 (~-$0.019)/ kWh from ₹0.68 (~-$0.0083)/ kWh YoY.

AT&C losses improved to 9% from 12.3% YoY due to improvement in collection efficiency of 100% from 97.3% YoY.

MESCOM supplies power to 2,564,242 customers. C&I consumers constitute 10.65% of total customers.

Chamundeshwari Electricity Supply Company (CHESCOM) sold 6,684 MU, generating revenue of ₹ 51.67 billion (~$631.49 million). CHESCOM’s recorded a net loss of ₹4.23 million (~$51.69 million)for FY22.

CHESCOM’s ACS-ARR gap improved to ₹-0.88 (~-$0.011)/ kWh from ₹1.23 (~-$0.015)/ kWh YoY.

AT&C losses improved to 11.3% from 20.3% YoY due to improvement in collection efficiency of 100% from 91.4% YoY.

CHESCOM supplies power to 3,583,588 customers. C&I consumers constitute 9.39% of total customers.

Gulbarga Electricity Supply Company (GESCOM) sold 7,827 MU, generating revenue of ₹66.36 billion (~$810.93 million). GESCOM’s net profit for FY22 was ₹110 million (~$1.34 million).

GESCOM’s ACS-ARR gap improved to ₹-0.73 (~-$0.0089)/ kWh from ₹1.27 (~-$0.016)/ kWh YoY.

AT&C losses improved to 10.5% from 20% YoY due to improvement in collection efficiency of 100% from 90.6% YoY.

GESCOM supplies power to 3,456,904 customers. C&I consumers constitute 11.21%of total customers.

Hubli Electricity Supply Company (HESCOM) sold 12,427 MU, generating revenue of ₹91.07 billion (~$1.11 billion). HESCOM incurred a net loss of ₹12.94 billion (~$158.1 million) in FY22.

HESCOM’s ACS-ARR gap improved to ₹-0.44 (~-$0.0054)/ kWh from ₹1.11 (~$0.014)/ kWh YoY.

AT&C losses improved to 13.5% from 14.2% YoY.

HESCOM supplies power to 5,663,978customers. C&I consumers constitute 10.10% of total customers.

Madhya Pradesh

Madhya Pradesh DISCOMs also improved their ratings, as presented in the table.

Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company (MPPaKVVCL) sold 32,213 MU, generating revenue of ₹173.52 billion (~$2.12 billion). MPPaKVVCL incurred a net loss of ₹22.44 billion (~$274.21 million) for FY22.

MPPaKVVCL’s ACS-ARR gap improved to ₹0.35 (~$0.0043)/ kWh from ₹1.12 (~$0.014)/ kWh YoY.

AT&C losses improved to 11.6% from 30.3% YoY due to improvement in collection efficiency of 100% from 79.9% YoY.

MPPaKVVCL supplies power to 5,794,529 customers. C&I consumers constitute 8.49% of total customers.

Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company (MPMKVVCL) sold 20,885 MU, generating revenue of ₹158.97 billion (~$1.94 billion). MPMKVVCL incurred a net loss of ₹2.58 billion (~$31.52 million) for FY22.

MPMKVVCL’s ACS-ARR gap improved to ₹0.26 (~$0.0032)/ kWh from ₹1.75 (~$0.021)/ kWh YoY.

AT&C losses improved to 26.4% from 49% YoY due to improvement in collection efficiency of 95.8% from 71.5% YoY.

MPMKVVCL supplies power to 4,913,893 customers. C&I consumers constitute 7.68% of total customers.

Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company (MPPoKVVCL) sold 17,613MU, generating revenue of ₹136.4 billion (~$1.66 billion). MPPoKVVCL incurred a net loss of ₹6.18 billion (~$75.5 million) for FY22.

MPPoKVVCL’s ACS-ARR gap improved to ₹0.27 (~$0.0033)/ kWh from ₹2.13 (~$0.026)/ kWh YoY.

AT&C losses improved to 31% from 45.4% YoY due to improvement in collection efficiency of 94.9% from 77.1% YoY.

MPPoKVVCL supplies power to 6,409,598customers. C&I consumers constitute 7.25% of total customers.

Maharashtra

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

MSEDCL sold 116,663 MU, generating revenue of ₹908.42 billion (~$11.09 billion). MSEDCL’s net profit for FY22 was ₹2.8 billion (~$34.21 million).

MSEDCL’s ACS-ARR gap improved to ₹0.08 (~$0.00098)/ kWh from ₹1.19 (~$0.015)/ kWh YoY.

AT&C losses improved to 15.5% from 27.2% YoY due to improvement in collection efficiency of 99.7% from 86.3% YoY.

MSEDCL supplies power to 28,873,382 customers. C&I consumers constitute 8.22% of total customers.

Rajasthan

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

Jaipur Vidyut Vitran Nigam (JVVNL) sold 27,941 MU, generating revenue of ₹279.41 billion (~$3.41 billion). JVVNL’s net profit for FY22 was ₹4.36 billion (~$53.26 million).

JVVNL’s ACS-ARR gap improved to ₹-0.36 (~-$0.0044)/ kWh from ₹0.6 (~-$0.0073)/ kWh YoY.

AT&C losses improved to 16.8% from 25.1% YoY due to improvement in collection efficiency of 100% from 93% YoY.

JVVNL supplies power to 5,038,760 customers. C&I consumers constitute 9.39% of total customers.

Ajmer Vidyut Vitran Nigam (AVVNL) sold 27,941 MU, generating revenue of ₹170.88 billion (~$2.08 billion). AVVNL’s net profit for FY22 was ₹5.58 billion (~$68.16 million).

AVVNL’s ACS-ARR gap improved to ₹-0.58 (~-$0.0071)/ kWh from ₹0.38 (~$0.0046)/ kWh YoY.

AT&C losses improved to 12.7% from 21.4% YoY due to improvement in collection efficiency of 100% from 92.6% YoY.

AVVNL supplies power to 5,431,063 customers. C&I consumers constitute 7.85% of total customers.

Jodhpur Vidyut Vitran Nigam (JDVVNL) sold 24,313 MU, generating revenue of ₹197.49 billion (~$2.41 billion). JVVNL recorded a net loss of ₹14.65 billion (~$179.02 million) for FY22.

JDVVNL’s ACS-ARR gap improved to ₹0.18 (~$0.0022)/ kWh from ₹1.18 (~$0.014)/ kWh YoY.

AT&C losses improved to 21.9% from 31% YoY due to improvement in collection efficiency of 100% from 89% YoY.

JDVVNL supplies power to 4,543,999 customers. C&I consumers constitute 7.99% of total customers.

Tamil Nadu

The Tamil Nadu Generation and Distribution Corporation retained its rating due to improved financial metrics.

TANGEDCO sold 80,613 MU, generating revenue of ₹613.71 billion (~$7.49 billion). TANGEDCO incurred a net loss of ₹119.55 billion (~$1.46 billion) for FY22.

TANGEDCO’s ACS-ARR gap improved to ₹1.79 (~$0.022)/ kWh from ₹2.12 (~$0.026)/ kWh YoY.

AT&C losses deteriorated to 13.5% from 11.9% YoY due to decline in billing efficiency of 87.9% from 89.5% YoY.

TANGEDCO supplies power to 31,747,501 customers. C&I consumers constitute 13.05% of total customers.

Telangana

The two Telangana DISCOMs retained their ratings in FY22 despite poor financial performance.

Northern Power Distribution Company of Telangana (TSNPDCL) sold 19,871 MU, generating revenue of ₹154.26 billion (~$1.88 billion). TSNPDCL incurred a net loss of ₹2.04 billion (~$24.92 million) for FY22.

TSNPDCL’s ACS-ARR gap deteriorated to ₹1.52 (~$0.019)/ kWh from ₹0.68 (~$0.0083)/ kWh YoY.

AT&C losses deteriorated to 14.1% from 9% YoY due to decline in collection efficiency of 94.2% from 100% YoY.

TSNPDCL supplies power to 6,348,874 customers. C&I consumers constitute 8.84% of total customers.

Southern Power Distribution Company of Telangana (TSSPDCL) sold 46,029 MU, generating revenue of ₹332.77 billion (~$4.06 billion). TSSPDCL incurred a net loss of ₹6.27 billion (~$76.61 million) for FY22.

TSSPDCL’s ACS-ARR gap improved to ₹1.4 (~$0.017)/ kWh from ₹1.6 (~$0.020)/ kWh YoY.

AT&C losses improved to 9.1% from 15.5% YoY due to decline in collection efficiency of 100% from 91.1% YoY.

TSSPDCL supplies power to 10,436,589 customers. C&I consumers constitute 11.70% of total customers.

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