Experts seek reassessment of Power Finance Corp’s annual discoms rating

Energy experts have urged a reassessment of the discom credit rating exercise being carried out on annual basis since 2012 by the Power Finance Corp Ltd (PFCL).

The report which is produced as a result of the exercise, rates the creditworthiness of electricity distribution companies, or discoms — whether money lent to them can be recovered promptly or not.

The exercise has not led to much reforms on the ground. Despite being rated poor, loans and finances have been arranged and weak discoms have survived a decade, which is not a good sign, the commentators said.

“For instance, the Tamil Nadu electricity distribution company always fares poorly in the exercise. But PFCL has been pumping loans to support its existence,” an expert told Down To Earth on the condition of anonymity.

A senior officer at Tamil Nadu Electricity Regulatory Commission called the ratings a ‘political exercise’.

“The coal prices are fixed by the central government, which reflects in the electricity prices. Tamil Nadu gets electricity at Rs 4.5 per unit but Gujarat or Haryana might get it cheaper. This is just one example. Unless level-playing fields are ensured, improving ratings of discoms will be difficult,” he said on the condition of anonymity.