From number one last year, Punjab State Power Corporation Limited (PSPCL) has slipped to 10 in Power Ministry’s fourth annual performance rating of 40 distribution utilities in 21 states.
Its A+ or ‘best’ grade has turned to B+ or ‘moderate’. There is no direct impact on central funding but banks and other credit institutions look at the report while extending loans. Since 2012, the utilities are evaluated on operational, financial, regulatory, and reform parameters; and the ratings highlight where the electricity distribution sector needs to improve. The current report was released on June 20 and uploaded on the ministry’s website this week.
The ministry, which coordinates the exercise with Power Finance Corporation (PFC), reports that high subsidised tariff for farmers has lowered the PSPCL’s cost efficiency. High employee cost, low regulatory clarity, and failure to file true-up petition (final audited accounts report) in the last two years counted as negatives. The impressive factors were low aggregate technical and commercial (AT&C) losses, net profit reported in the last three years, power purchase cost adjustment, quality of service, and public interface.
The ministry wants the timely filing of final accounts report and the proper implementation of Ujwal Discom Assurance Yojana or Uday scheme (a financial turnaround package). The PSPCL management, which last year was quick to take credit for the A+ rating, said the factors given in the new report were beyond its control.
“Giving subsidy on electricity (to the farm sector) is a decision of the state government. Even if it takes our rating down, we can’t change it,” said PSPCL chairman and managing director KD Chaudhri, adding: “For the delay in filing the audited reports, the comptroller and auditor general’s office is to blame. We will study the report to see where the ministry wants us to improve.”
The ministry gives scores for financial performance, audited accounts, cross subsidy, reforms, regulatory environment, and forward-looking parameters.