Report of Indian Institute of Public Administration ... - Ministry of Power

ACS*
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
Table: Financial Viability of the DISCOMs
ARR#
(without
subsidy)
Gap
(without
subsidy)
Gap
(subsidy
booked basis)
2.40
Gap
(subsidy
realised basis)
Gap
(subsidy, revenue
realised basis)
2002-03
DHBVNL 2.21 1.9 0.31 -0.01 -0.01 0.16
UHBVNL 2.31 1.74 0.57 -0.01 -0.01 0.17
2003-04
DHBVNL 2.21 1.86 0.34 -0.04 0.02 0.11
UHBVNL 2.4 1.78 0.62 -0.04 0.01 0.19
2004-05
DHBVNL 2.41 1.88 0.53 0.15 0.15 0.25
UHBVNL 2.74 1.83 0.90 0.2 0.2 0.48
(Source: PFC)
* ACS = Average cost of supply (Total Expenditure/Total Energy Input)
# ARR = Average Revenue Realised
A similar analysis has also been performed in respect of some of the Utilities based on
data given in the PFC report on the ‘Performance of State Utilities for the years 2002-
03 to 2004-05’. The comparative graph reveals the poor performance of DISCOMs in
Haryana. While most of the DISCOMs in the graph had a comparable gap in 2002-03,
by 2004-05 the gap in case of Haryana had increased. The subsidy support was
required by most of the States to cover the gap, however, the gap further aggravates
when calculated on revenue-realised basis. The gap on revenue realised basis show a
negative trend for most of the DISCOMs that implies the level of metering and
collection efforts the DISCOMs have put to recover the revenues. However, in case of
Haryana, the gap reflects a steep increase on account of increasing receivables. (Please
refer Annexure-II)
Profitability of the DISCOMs
The trend of profit and loss of the DISCOMs is provided below. The curve shows a
reversal of trends with DISCOMs reporting a profit of Rs 70 crore in 2003-04 against
a loss of Rs 414 crore in 1999-00. The same may be partly attributed to the truing up
of power purchase cost from Faridabad Gas Power Station, which led to reversal of
the already paid cost by the consumers.
In 2004-05, the DISCOMs again reported a loss of around Rs 397 crore, which
reflects that the DISCOMs could not sustain the efforts of enforcement and other loss
reduction initiatives. Reduction in the loss levels for initial years of reform may also