Centre downgrades ratings of Punjab discoms by placing these in C+ category

Chandigarh, December 2

The Centre has downgraded the consumer service rating of Punjab discoms by placing these in the C category. Last year, the rating was A.

Suggests shift to prepaid power meters

• The Centre wants the state discoms’ consumer services to be improved and made financially strong
• The state has been asked to go in for the “good practice” of monthly bills by leaving its bi-monthly system of billing
• It has been asked to make a move towards pre-paid power meters

The new ratings have been conveyed to Chief Minister Bhagwant Mann by Union Power Minister RK Singh. The Centre wants state discoms’ consumer services to be improved and made financially strong. Punjab discoms have been placed under the B category in the integrated rating report.

However, the integrated rating report has raised the issue of delay in the release of power subsidy by the state government; the increasing trend in aggregate transmission and commercial losses (at 18.03 per cent in 2020-21); and low debt service coverage ratio.

Punjab has been asked to go in for the “good practice” of monthly bills by leaving its bi-monthly system of billing. The state has also been asked to make a move towards pre-paid power meters. Punjab has also been pulled up for zero per cent bill generation in the non-manual billing mode, compared to the 19 per cent national average. As a result of these “flaws” found by the rating agencies, the state has been placed in the lowest category (D) for its metering, billing and collection services.

The state has also been pulled up for slow release of new connections and processing few applications online. Under this head too, the state has been placed in the D category.

Union Minister RK Singh, in his letter, has cautioned the CM saying, “…the utilities, which are constantly ranked low, find it difficult to attract funding from commercial financial institutions on attractive terms and conditions, which, in turn, adversely affects the cost of supply to the consumers and the ability of the utilities to perform their obligation towards the consumers for maintaining uninterrupted 24X7 quality supply of power. Funding agencies, including the PFC and the REC, use the integrated ratings report to benchmark their rates of interest and other important terms related to loans extended by them to the utilities — better the rating, lower is the interest rate and better loan exposure. Hence, it has to be ensured that corrective actions are taken so that the state discoms can avail of funding at attractive terms and conditions.”