The Meghalaya Power Distribution Company Limited (MePDCL) has performed badly among power distribution utilities in the country.
In the 10th Integrated Rating Exercise covering 71 power distribution utilities comprising 46 state discoms, 14 private discoms and 11 power departments across all states and union territories of India, MePDCL was placed at the bottom 52 rank with ‘D’ grading.
The integrated rating report which was released yesterday provides an overall ranking of the performance of utilities, along with various parameters including specific financial ratios which identify the exact problem areas specific to the power distribution utilities.
Dakshin Gujarat Vij Company Limited (DGVCL) of Gujarat topped the ranking with A+ grading followed by Madhya Gujarat Vij Company Limited (MGVCL) of Gujarat with 2 A+ grading. The third position was secured by DNH Power Distribution Corporation Limited (DNHPDCL) of Dadra & Nagar Haveli with A+ grading.
According to the key findings, MePDCL has a high cash adjusted ACS-ARR gap of Rs 1.63 per kWh (bottom tertile in the sector). The primary driver of its high ACS-ARR gap is high power purchase costs, operation and maintenance expenses, and interest costs (bottom tertile).
However, its cash adjusted revenue lies in the top tertile. MePDCL’s performance on all ACS-ARR gap components declined during FY2019-FY2021.
However, among its good performances is high collection efficiency, at 99.4 percent and significant improvement in billing efficiency, currently at 68.7 per cent.
The distribution losses of MePDCL are currently at approximately 2.6 times the approved figure of State Electricity Regulatory Commission (SERC).
As far as the parameter of ‘external environment’, MePDCL showed receipt of 100 per cent of tariff subsidy over the last three financial years. However, government dues are at 38 per cent for the last three financial years. The report also mentioned that there were delays in issuance of tariff orders.
MePDCL is a State owned discom incorporated in December 2009. It serves over 1.6 lakh customers in Meghalaya. According to the rating report, in FY2021, MePDCL had a revenue of Rs 989 crore and the profit after tax is Rs 425 crore. It also sold 1,326 million units of energy.
The outcomes and insights from the 10th Integrated Rating Exercise is as per the framework approved by the Ministry of Power, with Power Finance Corporation Limited (PFC) as the nodal agency. REC Limited provided valuable feedback and inputs on the methodology. The utilities across states were forthcoming with sharing data.
Analysis and recommendations for the rankings and Tenth Integrated Ratings of the power distribution utilities, based on audited and provisional accounts of power distribution utilities, have been carried out by McKinsey & Company Inc.
The committee constituted for the 10th Integrated Rating Exercise – with representatives from Central Electricity Authority (CEA), National Institute of Public Finance and Policy (NIPFP), PFC and REC – also contributed to the recommendations for the report submitted to the Ministry of Power. The rankings and Tenth Integrated Ratings have been approved by the Ministry of Power.
