Two decades after the restructuring of state electricity boards was initiated, some leading boards are still struggling. SEBs have been split into independent entities or profit centres that are accountable for three principal functions—generation, transmission and distribution. The generation and transmission sectors have undergone many positive changes, making them more cost effective. But a recent report from the Union power ministry shows that distribution companies or discoms are still reeling under challenges such as billing, collection and subsidy realisation.
The report ranks Adani Electricity Mumbai at the top for the third time in a row on the composite score, with an A+ rating shared with 10 other discoms. While four discoms from Gujarat share the top rating, those from big states such as Tamil Nadu, Uttar Pradesh, Madhya Pradesh, Telangana, Rajasthan and Maharashtra have a long way to catch up. Among the southern states, the highest-ranked ones are Eastern Power Distribution Company of Andhra Pradesh and Kerala State Electricity Board. Out of the 63 discoms and power departments rated, the aggregate technical and commercial losses shrank for 40 in 2023-24. The grades improved for 15 discoms and six power departments, and dropped for 13 discoms.
Tamil Nadu Power Distribution Corporation is a case study in what ails the sector. It continues to be near the bottom of the table, with a rank of 48. Its collection and billing efficiency has slipped. Experts cite the closure of a third of the direct collection centres and reduced manpower as the prime reasons. The state evidently needs to invest heavily in its debt-ridden discom. It’s installing smart meters to reduce commercial losses and installing more high-tension power lines to improve transmission.
The tools to enhance the overall performance of discoms include digital payment, efficient complaint resolution, smart metering, automation, infrastructure development, and a focus on renewable energy and sustainability. The need to work on these fronts is sharpening with the surge in power demand. During the summer of 2024, India met an all-time high demand of 250 gigawatts. The increase in per-capita consumption to 1,395 kilowatt-hour in 2023-24, a 46 percent rise over the previous decade, highlights India’s growing energy needs. That’s why the power sector’s health needs to improve—it’s necessary for the country’s economic growth.