PSPCL slips in national ratings, now ranks 16th

Aman Sood

Patiala, August 13

Punjab State Power Corporation Limited (PSPCL) has slipped this year to ‘B’ grade from its ‘A’ grade last year as per the 10th annual ranking report for financial year 2020-21. PSPCL is placed 16th in the current ranking.

Central grants May be cut

• Experts say that the ranking goes a long way in putting forth the state Power Department’s demand to the Union Government for release of more grants to the state
• “The lower the ranking, the more difficult it becomes for the state power utilities to put forth demands for more and new financial aid,” they say

The national-level rating of PSPCL, which was B+ for 2016-17, improved to A+ (top ranking) in 2018-19.

The 10th integrated rating exercise covered 71 power distribution utilities comprising 46 state discoms, 14 private discoms and 11 power departments across India. In the ninth rating, only 41 state utilities were covered. This year, a total of 12 power utilities, comprising six state-owned and six private distribution companies, out of 71 received A+ rating.

Out of six state discoms with A+ grade, four are from Gujarat and one each from Daman and Diu and Haryana.

This year’s ratings are based on 75 per cent marks for financial stability, 13 per cent for performance excellence and 12 per cent for external environments.

Utilities getting more than 85 per cent are placed in ‘A+’ grade, 65 to 85 per cent in ‘A’ grade and 50 to 65 per cent in ‘B’ grade.

As per the report, PSPCL’s areas of concern are high operation and maintenance cost at 16 per cent of revenue booked, low debt service ratio, the average collection efficiency of 94.9 per cent delay in tariff timeline and improvement in corporate governance.

The areas of concern listed for the state in this year’s rating are the state’s absolute subsidy dependence which remains high given the subsidised nature of tariff particularly towards agriculture consumers coupled with delay in receipt of subsidy.

The state’s high cost of power purchase and low cost efficiency on account of high employee cost are also listed as key concerns in the report. The increase in unpaid bills of government departments amounting to over Rs 2,500 crore is another reason for reduced collection efficiency and, hence, lower rating.

All-India Power Engineers Federation spokesman VK Gupta said, “With the main focus being on financial health of power companies, the high cost of power purchase and non-payment of subsidy are the main reasons for the lower rating.”

“Earlier, only government departments were part of the ratings. Now, small private firms have been made part of this exercise and they do not have big distribution and subsidy dependency on governments,” said a PSPCL official.