The performance of various electricity distribution companies has been indicated by the power ministry. BESCOM gets a rating of B+ which is third from the top. The PDF cannot be attached as it exceeds the 1 MB limit for attachments.
According to the report,
The main objectives of developing the integrated rating methodology for the state distribution utilities are:
- To devise a mechanism for incentivising/dis-incentivising the entities in order to improve their
operational & financial performance.
- To facilitate realistic assessment by Banks/FIs of the risks associated with lending exposures to various distribution utilities and enable funding with appropriate loan covenants for bringing improvement in operational, financial and managerial performance.
- May serve as a basis for Govt. assistance to the state power sector through various schemes like RAPDRP,NEF, etc.
MoP has mandated Power Finance Corporation (PFC) to co-ordinate the rating exercise, which in turn has appointed ICRA & CARE to carry out the rating exercise. The exercise does not cover State Power/Energy Departments and private sector distribution utilities.
The parameters for the ratings are given below:
Sr. No. Parameters Weightage 1 Financial Performance 63 2 Audited Accounts 5,-12 3 Cross Subsidy 0,-2 4 Reform Measures - Unbundling & Corporatisation 0,-5 5 Regulatory Environment 15,-15 6 Forward looking parameters 5,-1 7 Incentive / Bonus marks 12 Total score 100
The parameters give an excessive weightage to financial performance that is subject to different push and pull based on subsidy (Eg: more farm-based clients = more subsidy), political set-up in the state (Eg: Gujarat govt. may be more forward-thinking than others), political set-up in country vis-a-vis state etc. Technical parameters like amount of wires insulated that prevent death / accidents by contact, transformers, underground cabling and so on should also be included. Also, all discoms, including private ones should be included in future exercises to provide better benchmarking and higher goals. This being the first time, experience would hopefully turn this into an annual, more fine-tuned exercise.
Four utilities, all from Gujarat, make the top rating of A+. The next two discoms have a rating of A. Bangalore (BESCOM), Mangalore (MESCOM) and Hubli (HESCOM) all make up the third rung at various places with a rating of B+. Our utilities would do well to set goals based on higher performers to reach A and ultimately A+ ratings. Though some parameters may be outside the control of utilities, they have to lobby hard with the state political setup to get their needs fulfilled.