Lucknow: The Uttar Pradesh govt is undertaking large-scale initiatives to improve power supply and infrastructure across the state and enhance the financial health of discoms but there is an urgent need for substantial investment to address the financial imbalance faced by discoms, according to officials.
The performance of UP's discoms under technical/operational parameters fell short in the Consumer Service Rating (CSRD) for FY 2022-23, conducted by REC under the ministry of power. Among 62 discoms nationwide, Paschimanchal ranked 58th, Purvanchal 54th, Madhyanchal 53rd, Dakshinanchal 52nd, and Kesco 33rd.
Similarly, in the 12th Annual Integrated Rating and Ranking (Mar 2024) by PFC, ministry of power, UP discoms saw little improvement. Out of 53 discoms evaluated across the country, Madhyanchal ranked 51st, Purvanchal 49th, Dakshinanchal 48th, Kesco 34th, and Paschimanchal 21st.
An audit of 21,500 feeders in UP conducted during Apr-Sep 2024 revealed high Aggregate Technical and Commercial (AT&C) losses. The findings revealed that over 66% of the feeders — approximately 14,180 —reported AT&C losses exceeding 50%.
Discom-wise, Purvanchal recorded the highest percentage of affected feeders at 78%, followed by Dakshinanchal at 73%, Madhyanchal at 62%, and Paschimanchal at 60%.
UP's power distribution companies (discoms) are grappling with a growing financial imbalance, underscoring the urgent need for structural reforms. Data reveals that while the annual expenditure of UPPCL and its associated discoms has been increasing at a compound annual growth rate (CAGR) of 10%, revenue collection is lagging, growing at only 7.75% CAGR.
The disparity is stark: expenditure rose from Rs 80,293 crore in the financial year 2021 to Rs 1,06,807 crore in 2024, an increase of over Rs 26,000 crore. In contrast, revenue receipts have grown by just Rs 12,487 crore during the same period, from Rs 49,846 crore to Rs 62,333 crore.
"To address financial challenges faced by UP discoms, it is essential to raise awareness among consumers who have not been paying their electricity bills. According to a report, approximately 62 lakh consumers (17.77% of the total) have never paid their bills, accumulating an outstanding amount of Rs 34,700 crore, including late payment surcharges (LPSC)," he said.
As of Sep 2024, only 30% of the total billable consumers have paid their bills.
There is also a need for improvement in revenue collection. In the current financial year, the revenue per unit (through rate) has decreased by 9 paise per unit in Oct 2024 compared to Oct 2023. Additionally, the AT&C loss has risen to 34.28% this year.
"The govt has been providing financial support to discoms, which includes both subsidy and loss subsidy. In the financial year 2021, the govt allocated Rs 8,217 crore, Rs 20,838 crore in 2022, Rs 22,519 crore in 2023, and Rs 31,045 crore in 2024," an official said.