DISCOMs Ranking June-2016 (4th Report)

State Distribution Utilities Fourth Annual Integrated Rating

JUNE, 2016

                                                                                      

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Ministry of Power formulated an Integrated Rating Methodology in July 2012 for evaluating performance of State Power Distribution utilities on a range of parameters covering operational, financial, regulatory and reform parameters. The rating exercise is on an annual basis and covers 40 state distribution utilities spread across 21 states.

State Power/ Energy Departments and private sector distribution utilities are however not covered under the integrated rating exercise.

ICRA and CARE are the designated credit rating agencies and have been assigned 21 and 19 utilities respectively. MoP has mandated Power Finance Corporation (PFC) to co-ordinate the rating exercise.

So far, three integrated rating exercises covering FY 2012, FY 2013 and FY 2014 have been completed. The first integrated ratings were released / declared by MoP in March 2013, the second in February 2014 and the last i.e. third integrated ratings were released by Hon‟ble Minister of State (IC) for Power, Coal and New & Renewable Energy on 10th August 2015.

A comprehensive review of Integrated Rating Methodology was taken up by MoP and based on the review, certain modifications providing for higher weightage to operational parameters were approved by MOP in February 2016. The Fourth Integrated Ratings, covering the rating year FY 2015, have been carried out under the revised integrated rating methodology.

UTILITIES COVERED BY ICRA & CARE

S.No.	Names of Distribution Utilities	S.No.	Names of Distribution Utilities
	Utilities graded by ICRA		Utilities graded by CARE
1	Dakshin Gujarat Vij Company Limited	1	Southern Power Distribution Company of Andhra Pradesh Limited
2	Uttar Gujarat Vij Company Limited	2	Eastern Power Distribution Company of Andhra Pradesh Limited
3	Madhya Gujarat Vij Company Limited	3	Kerala State Electricity Board Limited
4	Paschim Gujarat Vij Company Limited	4	Southern Power Distribution Company of Telangana Limited
5	West Bengal State Electricity Distribution Company Limited	5	Himachal Pradesh State Electricity Board Limited
6	Maharashtra State Electricity Distribution Company Limited	6	Northern Power Distribution Company of Telangana Limited
7	Bangalore Electricity Supply Company Limited	7	Chhattisgarh State Power Distribution Company Limited
8	Mangalore Electricity Supply Company Limited	8	Uttar Haryana Bijli Vitran Nigam Limited
9	Hubli Electricity Supply Company Limited	9	Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited
10	Gulbarga Electricity Supply Company Limited	10	Dakshin Haryana Bijli Vitran Nigam Limited
11	Punjab State Power Corporation Limited	11	Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited
12	Assam Power Distribution Company Limited	12	Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited
13	Chamundeshwari Electricity Supply Corporation Limited	13	Tripura State Electricity Corporation Limited
14	North Bihar Power Distribution Company Limited	14	Uttarakhand Power Corporation Limited
15	South Bihar Power Distribution Company Limited	15	Jaipur Vidyut Vitran Nigam Limited
16	Tamil Nadu Generation & Corporation Limited	16	Meghalaya Power Distribution Corporation Limited
17	Purvanchal Vidyut Vitran Nigam Limited	17	Ajmer Vidyut Vitran Nigam Limited
18	Paschimanchal Vidyut Vitran Nigam Limited	18	Jodhpur Vidyut Vitran Nigam Limited
19	Kanpur Electricity Supply Company Limited	19	Jharkhand Bijli Vitran Nigam Limited
20	Dakshinanchal Vidyut Vitran Nigam Limited
21	Madhyanchal Vidyut Vitran Nigam Limited

RATING APPROACH / INPUTS

               The parameters that have been used for the rating

S. No.	Parameters	Weightage / Maximum Score
1	OPERATIONAL & REFORM Parameters	47
I)	Operational related
i)	AT&C Losses	28,-4
ii)	Power purchase	6
iii)	Cost Efficiency	6
iv)	Public Interface / Quality of Service (limited to 3 marks)	3
II)	Reform related
v)	Achievement of target set under DDUGJY scheme	2
vi)	RPO Compliance	2
2	EXTERNAL Parameters	20
I)	Regulatory	12,-19
II)	Govt. Support	8
3	FINANCIAL Parameters	33
I)	Ratios
A	Cost Coverage Ratio	15
II)	Sustainability	6
III)	Receivables	4
IV)	Payables	3
V)	Audited Accounts	5,-12
VI)	Audit Qualifications	0,-1
VII)	Default to Banks / FIs	0,-2
	Total	100

GRADING SCALE AND GRADES

Score Distribution	Grade	No. of Utilities	Grading Definition
Between 80 and 100	A+	3	Very High Operational and Financial Performance Capability
Between 65 and 80	A	6	High Operational and Financial Performance Capability
Between 50 and 65	B+	10	Moderate Operational and Financial Performance Capability
Between 35 and 50	B	8	Below Average Operational and Financial Performance Capability
Between 20 and 35	C+	8	Low Operational and Financial Performance Capability
Between 0 and 20	C	5	Very Low Operational and Financial Performance Capability

UTILITY - WISE GRADES

S.No.	Name of Utility	State	Rating Agency	4th IR Grade (FY 2015)
1	Uttar Gujarat Vij Company Limited	Gujarat	ICRA	A+
2	Dakshin Gujarat Vij Company Limited	Gujarat	ICRA	A+
3	Madhya Gujarat Vij Company Limited	Gujarat	ICRA	A+
4	Paschim Gujarat Vij Company Limited	Gujarat	ICRA	A
5	Mangalore Electricity Supply Company Limited	Karnataka	ICRA	A
6	Bangalore Electricity Supply Company Limited	Karnataka	ICRA	A
7	Uttarakhand Power Corporation Limited	Uttarakhand	CARE	A
8	Chamundeshwari Electricity Supply Corporation Ltd.	Karnataka	ICRA	A
9	Southern Power Distribution Company of Telengana Limited	Telangana	CARE	A
10	Punjab State Power Corporation Limited	Punjab	ICRA	B+
11	Himachal Pradesh State Electricity Board Limited	Himachal Pradesh	CARE	B+
12	Eastern Power Distribution Company of AP Limited	Andhra Pradesh	CARE	B+
13	Chhattisgarh State Power Distribution Company Ltd.	Chhattisgarh	CARE	B+
14	Maharashtra State Electricity Distribution Company Ltd	Maharashtra	ICRA	B+
15	West Bengal State Electricity Distribution Company Ltd	West Bengal	ICRA	B+
16	Northern Power Distribution Company of Telangana Limited	Telangana	CARE	B+
17	South Bihar Power Distribution Co. Ltd.	Bihar	ICRA	B+
18	Kerala State Electricity Board Limited	Kerala	CARE	B+
19	Hubli Electricity Supply Company Limited	Karnataka	ICRA	B+
20	Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co Ltd	Madhya Pradesh	CARE	B
21	Gulbarga Electricity Supply Company Limited	Karnataka	ICRA	B
22	Madhya Pradesh Pash. Kshetra Vidyut Vitaran Co Ltd.	Madhya Pradesh	CARE	B
23	Southern Power Distribution Company of AP Limited	Andhra Pradesh	CARE	B
24	Assam Power Distribution Company Limited	Assam	ICRA	B
25	North Bihar Power Distribution Co. Ltd.	Bihar	ICRA	B
26	Madhya Pradesh Madhya Kshetra Vidyut Vitran Co Ltd	Madhya Pradesh	CARE	B
27	Paschimanchal Vidyut Vitaran Nigam Limited	Uttar Pradesh	ICRA	B
28	Dakshin Haryana Bijli Vitran Nigam Limited	Haryana	CARE	C+
29	Kanpur Electricity Supply Company Limited	Uttar Pradesh	ICRA	C+
30	Jodhpur Vidyut Vitran Nigam Limited	Rajasthan	CARE	C+
31	Uttar Haryana Bijli Vitran Nigam Limited	Haryana	CARE	C+
32	Ajmer Vidyut Vitran Nigam Limited	Rajasthan	CARE	C+
33	Jaipur Vidyut Vitran Nigam Limited	Rajasthan	CARE	C+
34	Tamil Nadu Generation and Distribution Corporation	TamilNadu	ICRA	C+
35	Dakshinanchal Vidyut Vitran Nigam Limited	Uttar Pradesh	ICRA	C+
36	Tripura State Electricity Corporation Limited	Tripura	CARE	C
37	Jharkhand Bijli Vitran Nigam Limited	Jharkhand	CARE	C
38	Madhyanchal Vidyut Vitran Nigam Limited	Uttar Pradesh	ICRA	C
39	Purvanchal Vidyut Vitaran Nigam Limited	Uttar Pradesh	ICRA	C
40	Meghalaya Power Distribution Corporation Limited	Meghalaya	CARE	C

SOUTHERN POWER DISTRIBUTION COMPANY OF TELANGANA LIMITED                A

Background

Southern Power Distribution Company of Telangana Limited (TSSPDCL), erstwhile APCPDCL (Andhra Pradesh Central Power Distribution Company Limited) is operating in the state of Telangana covering five districts and catering to over 8 million consumers. Erstwhile APCPDCL was formed on March 31, 2000. Consequent on enactment of Andhra Pradesh (AP) Reorganisation Bill, 2014, the name of the Company has been changed to Southern Power Distribution Company of Telangana Limited with effect from June 02, 2014. Presently TSSPDCL operates as a distribution licensee in the southern part of Telangana covering five districts, i e, Hyderabad, Mahaboobnagar, Nalgonda, Medak and Rangareddy.

Key Strengths

·      Significant improvement in AT&C losses in FY 2015 to 11.30% due to better collection efficiency

·      Healthy billing efficiency of 88.70% in FY 2015

·      Timely receipt of tariff subsidy

·      Moderate cost coverage of 0.96x in FY 2015

·      Implementation of key reform measures

Key Concerns

·      High power purchase cost of ₹ 4.63 per unit in FY 2015

·      Sourcing of power through LT sources stood low at 83% in FY 2015

·      Delay in filing of ARR for FY 2017

·      Automatic pass through of fuel cost mechanism not implemented

·      Delay in finalization of audited accounts

Key Actionables

·      Continued maintenance of reduced level of AT&C losses and healthy collection efficiency

·      Timely finalization of audited accounts

·      Timely filing of ARR by November 30 for the next financial year

·      Rationalization of power purchase cost by higher sourcing through long-term sources

·      Implementation of a mechanism for automatic pass through of power cost

NORTHERN POWER DISTRIBUTION COMPANY OF TELANGANA LIMITED                B+

Background

The Northern Power Distribution Company of Telangana Limited (TSNPDCL), erstwhile APNPDCL (Andhra Pradesh Northern Power Distribution Company Limited) was incorporated under the Companies Act, 1956 as a Public Limited Company on March 30, 2000 to carry out electricity distribution business as part of the unbundling of erstwhile APSEB. The company caters the electricity supply to Warangal, Karminagar, Khammam, Nizamabad and Adilabad districts. Consequent on enactment of Andhra Pradesh (AP) Reorganisation Bill, 2014, the name of the Company has been changed to Northern Power Distribution Company of Telangana Limited with effect from June 02, 2014.The company reaches out to a consumer base of 155.22 lakh spread across hamlets, villages, towns and cities.

Key Strengths

·      AT&C losses improved to 16.04% in FY 2015 from 22.37% in FY 2014

·      Healthy improvement in collection efficiency to 96.79% in FY 2015

·      Tariff order issued as per the regulations for FY 2016

·      Timely receipt of tariff subsidy

·      Implementation of key reform measures

Key Concerns

·      High power purchase cost at ₹ 4.67 per unit in FY 2015

·      Sourcing of power through LT sources stood low at 76% in FY 2015

·      High employee cost at 12.72% of revenue in FY 2015

·      Low consumer metering at 80% in FY 2015

·      Tariff petition for FY 2017 not filed

·      Significant dip in cost coverage to 0.76x in FY 2015

·      Delay in finalization of audited accounts

Key Actionables

·      Continuation of reduction in AT&C losses and further improvement in collection efficiency

·      Level of consumer metering to be increased

·      Timely filing of tariff petition and finalization of audited accounts

·      Higher proportion of long term PPAs for meeting power purchase requirements

·      Cost coverage to be improved through suitable tariff increase and rationalization of costs

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