Punjab, Karnataka, and Maharashtra have topped the list of states in the first-ever assessment of regulatory performance in the power sector, with scores of 97, 96, and 94 out of 100, respectively.

Assam and Arunachal Pradesh rounded off the top five with scores of 93 and 91, respectively, according to the “Rating Regulatory Performance of States and Union Territories 2025” report released jointly by the Power Foundation of India (PFI) and REC.

The report presents a structured, evidence-based assessment of the regulatory performance of states and union territories (UT), focusing on the effectiveness of electricity regulation in ensuring reliable, affordable, consumer-centric, and sustainable power supply.

The rating exercise reviews the regulatory performance on a 100-point scale. The performance is assessed based on a set of core parameters covering resource adequacy (32 marks), financial sustainability (25), ease of doing business (23), energy transition (15), and regulatory governance (5). The evaluation is based on verifiable regulatory instruments, including tariff orders, true-up orders, regulations, and rules issued up to June 30, 2025.

Based on their overall scores, the states and UTs have been categorized into performance grades A, B, C, D, and E. According to the report, 21 states and UTs achieved A and B grades, demonstrating strong regulatory practices, marked by timely tariff determination, cost-reflective tariffs, improved consumer service standards, and proactive support for renewable energy integration.

The report highlighted strong performance across several states and identified gaps that warrant greater attention and institutional strengthening. “The objective of this exercise is not to rank for competition, but to enable cross-learning, promote adoption of best practices, and encourage the development of a consistent, predictable, and consumer-centric regulatory environment across the country,” it said.

The Ministry of Power’s annual ratings for government and private power utilities focus mainly on financial performance, whereas the PFI-REC report focuses on how the state electricity regulatory commissions are enforcing energy transition mandates, such as renewable procurement obligations and green energy open access, formulating resource adequacy plans, and protecting consumer rights.

In all, 11 states and UTs received an A grade (85 marks and above), 10 received a B grade, 10 received a C grade, 4 received a D grade, and 1 received an E grade.

Punjab scored 32/32 for reliability of power supply, 25/25 for the financial health of distribution companies (DISCOMs), 23/23 for ease of business, 12/15 for energy transition, and 5/5 for regulatory governance.

 

Renewables-rich Rajasthan fared poorly with a total score of 39/100 and a D grade. Andhra Pradesh, Tamil Nadu, Telangana, and West Bengal were graded C, while Gujarat and Odisha got a B rating. Gujarat scored just 10/32 for resource adequacy.

The report noted that many top-performing states complied with Green Energy Open Access Rules and Renewable Purchase Obligation trajectories notified by the Ministry of Power. Compliance among the laggard states on these parameters was mixed.

The PFI-REC report also highlighted that the DISCOMs continued to incur losses, with the accumulated losses climbing to ₹6.47 trillion (~$71.35 billion) in the financial year (FY) 2024-25. Aggregate Technical and Commercial losses, however, improved to 15.04% in FY 2024-25.