HYDERABAD: Telangana may have peaked in the country’s per capita electricity consumption, 2,071 units, and increased its power generation in recent years, but its two power distribution companies have achieved poor performance in terms of operational and financial capacities in an annual survey. The poor performance has been attributed to the cost of purchasing high power as the benchmark and the failure to file the tariff with the state regulatory commission, the continued losses recorded over the past three years.
The Ministry of Energy (MoP) has been running annual integrated rating exercises for 41 distribution companies through private agencies – ICRA Analytics Limited and CARE Advisory Research and Training Limited – since 2013. The ninth integrated rating was posted by MoP on Friday.
State Electric Utilities, Telangana Southern Power Distribution Company Limited (TSSPDCL) and Telangana Northern Power Distribution Company Limited (TSNPDCL) were rated “Below Average Operational and Financial Performance Capability Between (Rating B)” and ‘Weak operational and financial performance capacity (C +)’ respectively.
“The total technical and commercial losses of TSNPDCL amounted to 34.49% during the last financial year (2020-2021) against 26.66% in 2019-2021. The cost of purchasing electricity raised to 5.26 yen per unit and the failure to file the tariff petition within the stipulated time frame, the failure to receive the subsidy from the state government and the lack of automatic pass-through of the cost of fuel led to the poor performance of the nightclub, ”the report stated.
Interestingly, both discoms, in particular TSSPDCL, were previously rated “Moderate Operational and Financial Performance Capability (B +)”, but it fell below average. Likewise, TSNPDCL further slipped from below-average operational and financial performance capacity to weak financial and operational performance capacity. In 2016, TSSPDCL obtained an “A” rating for its high operational performance.
Explaining the reasons, Discom officials said the electric utilities were facing financial problems due to increased subsidies, operating costs, and non-receipt of government subsidies from the State in a timely manner. The discoms currently have losses to the tune of around 20,000 crore.
To meet the demand for electricity, the Telangana power utilities have entered into agreements with power producers. The other reason was that, given the ongoing elections, the state government did not allow discoms to revise electricity tariffs because utilities did not submit aggregate revenue requirements. (ARR) to the Telangana State Electricity Regulatory Commission (TSERC).
The Comptroller and Auditor General (CAG), in his recent report released in March 2021, said TSSPDCL and TSNPDCL suffered a loss of 8,018 crore on total PSUS power losses, 28,000 crore, over the past six years. .
Rating agencies have suggested that discoms take action to reduce overall technical and commercial (AT&C) losses and improve their collection efficiency. They must ensure the timely receipt of the subsidy owed by the state government and file a tariff request with TSERC. Cost coverage should be improved through an appropriate tariff review and cost rationalization, according to the report.

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