VOICE OF ELECTRICITY WORKERS

July 2005 - September 2005 Index

PFC RELEASES REPORT ON POWER SECTOR PERFORMANCE

Recently, the Power finance Corporation (PFC) came out with a report on the operational and financial performance of the state power  sector in 2003-04. This is the  second report by PFC, a task of it took over from the Planning Commission published the annual report on the working of the SEBs/EDs. 

The recent report includes all the 29 states as well as the Union territory of Pondicherry.  In addition to the power utilities, it also covers the power departments and private distribution companies.  In all, 70 power utilities have been covered.  Here is an excerpt from the report.

Generation: The total generation showed    an increase from 277,648 MUs in 2002-03 to 288,189 MUs in 2003-04, an increase 3.8 percent. Of this, gas showed the highest increase of 31.53 per cent. The share of hydro increased in total generation from 16.3 per cent in 2002-03 to 17.4 per cent in 2003-04.  The increase in generation was mainly in the northern (10.6 per cent) and eastern (13 per cent) regions, while  the southern region showed a decline of 2.2 per cent. The average PLF was more or less the same at 68 per cent in the two years.  Power “purchases” by the SEBs, power departments and transcos increased from 271,553 MUs to 298,779 MUs in 2003-04, indicating a reliance on central and private sector generation for meeting additional demand.  The total energy handled for sale also increased by 7.45 per cent, the maximum growth being in the eastern region.

 AT&C losses: Average AT&C losses at the national level increased marginally from 38.28 per cent in 2002-03 to 39.22 per cent in 2003-04.  These losses came down in 18 states in 2003-04 over the previous year, but increased in 11 states during the same period. Thirteen states had AT&C losses in the range of 30 to 50 percent while 11 states had more than 50 per cent.  Among the unbundled states, AT&C losses came down in Delhi, Haryana and   Andhra Pradesh but increased in Orissa, Rajasthan and Karnataka during 2003-04 over 2002-03.  Meanwhile, technical losses for the transcos, excluding UPPCL, came down by 2.11 per cent to 4.68 per cent during the year.  RRVPNL showed an increase in technical loses from 6.14 per cent to 6.41 per cent.

Financial parameters: Worryingly, the number of utilities incurring cash losses on a subsidy –booked basis as well as subsidy-received basis increased during 2003-04.  Of the 66 utilities analysed (excluding the Uttar Pradesh discoms), 31 booked a net loss. Twenty-one states registered a cash loss despite booking a subsidy while 29 states registered cash losses despite receiving   subsidy.  The subsidy booked reduced from Rs.136.69 billion in 2002-03 to Rs.104.93 in 2003-04.  There was also a reduction in the subsidy released by the state governments.  The state governments released 83 per cent of the subsidy   booked.  During 2003-04, the subsidy released amounted Rs.84.88 billion, which is 80 per cent of the booked subsidy of Rs. 104.93 billion.

Consumption pattern and revenue contribution: Total power sales increased by 9.14 per cent in 2003-04 over the previous year.  Power sales to agricultural consumers increased by 14.18 per cent.  However, the increase in agricultural consumption was not commensurate with the increase in revenues from agricultural consumers.  The revenue from agriculture increased by only 3.8 per cent.  Meanwhile, the sale of power to industrial consumers increased by 13.3 per cent in 2003-04 over the previous year.  However the share of revenue from industrial consumers in the total revenue reduced from 46.6 per cent to 46.48 per cent in 2003-04. 

Financial position: The total capital employed in the sector increased by 10.9. per cent employed in the sector to Rs 1,502.3 billion.  The major part of the capital employed was from FIs, banks and market borrowings (64 per cent), state government (30 per cent) and internal resources (2 per cent). The net fixed assets and WIP registered a growth of only 3 per cent.  The level of accumulated losses increased about Rs 100 billion, reducing the net worth to Rs 32.95 billion in 2003-04.  The receivables remained high.  Twenty-four utilities had receivables of above 90 days. The total receivables from the consumers of the  SEBs, discoms and utilities were of the order of  Rs 335.84 billion in  March 2004. 

 Profitability: An analysis of the last two years showed that the number of utilities with positive return on equity increased from 26 to 27 from 2002-03 to 2003-04, on a subsidy-booked basis.  Forty-four utilities had positive net worth while 25 utilities had negative net worth. 

Basically, the PFC analysis reiterates the trend that emerged from recent rating reports from CRISIL and ICRA.  The power sector’s bottomline has insignificant improvement.  

Copyright © 2002 - 2005 Electricity Employees Federation of India. All Rights Reserved.
Email: info@eefi.org · Feedback · Terms and Conditions ·