Andhra power distributors' rating down due to low score in financial parameters

VIJAYAWADA: Although the two major power distribution companies (Discoms) of Andhra Pradesh managed to maintain lower aggregate technical and commercial (AT and C) losses in the financial year (FY) 2020, their overall ranking has been downgraded owing to low scores in financial and external parameters related to the regulatory environment.

While the largest Discom APSPDCL has been downgraded from B+ to B, APEPDCL saw a steep drop from A to C, according to the recently issued rankings by the Union government’s Power Finance Corporation (PFC) Ltd.

The power utilities of other states such as Telangana, Tamil Nadu, Karnataka and Rajasthan have also been downgraded. In the ranking and ninth annual integrated rating of state distribution utilities by the Navratna company, PFC Ltd, APSPDCL and APEPDCL ranked 19th and 34th out of 41 Discoms evaluated from across the country by the Union ministry of power. The utility-wise ranking has been carried out for the first time this year. 

According to the report released last week, APEPDCL had key strengths such as low AT and C losses of 6.64 per cent in the financial year FY20, satisfactory billing efficiency at 93.36 per cent, improvement in cost coverage ratio to 0.98 from the previous year’s 0.65, and timely filing of tariff petition. However, it noted that the financial statements’ audit report doesn’t give a true and fair view of the loss, position of changes in equity and cash flow. 

It also said that non-receipt of revenue subsidy in a timely manner, no automatic pass-through of fuel costs and high payables at 195 days (previous at 206 days) were key concerns. Similarly, for APSPDCL, it said low AT and C losses at 13.19 in financial year 20, satisfactory power purchase planning with around 95 per cent power procured from long term sources, satisfactory cost-efficiency parameters in terms of operations and maintenance, and timely filing of tariff petition were the key strengths.

But, the high receivable and payable days at 140 days and 155 days respectively, low-cost coverage at 0.90, high employee cost at 13.72 per cent of revenue from operations, non-receipt of revenue subsidy in a timely manner remained SPDCL’s key concerns.