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India develops rapidly with an economy that grows consistently. The electricity sector in India ranks as one of the fastest-growing in the world. Having emerged as the top-most electricity distribution company in India among 71 such discoms, Adani Electricity Mumbai Ltd (Adani Electricity) holds a prominent position.
The company secured Grade A+ and achieved the highest integrated score of 99.6 out of 100 according to the power ministry's 11th edition of the ‘Annual Integrated Rating and Ranking’ of the power distribution utilities across India. McKinsey and Company compiled the report, assessing the accounts of electricity distribution companies for three financial years from 2019-2020 to 2022-2023.
DISCOM stands for "distribution company". In India, DISCOMs are utility companies that buy power from generators and sell it to consumers. States are responsible for distributing electricity to rural and urban consumers.
The 11th Annual Integrated Rating and Ranking of Power Distribution Utilities report was recently published. This report, conducted by the Power Finance Corporation Limited, evaluates 71 power distribution utilities across India, including 45 state discoms, 14 private discoms, and 12 power departments.
The rating methodology assesses the performance of discoms based on three main parameters: financial sustainability (75% weightage), performance excellence (13% weightage), and external environment (12% weightage). The methodology uses 15 base rating metrics and nine disincentives to calculate a score out of 100, providing a comprehensive evaluation of each discom’s performance. The discoms are then assigned grades based on these scores.
Here are the top five Discoms in India that have been recognized for their performance:
Top five Discoms in India
| Utility | State | Ownership | Grade Movement | Grade |
|---|---|---|---|---|
| Adani Electricity Mumbai Limited | Maharashtra | Private Utility | Upgrade | A+ |
| Uttar Gujarat Vij Company Limited | Gujarat | State Utility | Upgrade | A+ |
| Madhya Gujarat Vij Company Limited | Gujarat | State Utility | Upgrade | A+ |
| Dakshin Gujarat Vij Company Limited | Gujarat | State Utility | Upgrade | A+ |
| Paschim Gujarat Vij Company Limited | Gujarat | State Utility | Upgrade | A+ |
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Other top-rated discoms
- Four state-owned discoms of Gujarat
- Two state-owned discoms of Haryana
- DNH Power Distribution Corporation Limited
The 11th Annual Integrated Rating and Ranking of Power Distribution Utilities report covered 57 discoms. Of those, 46 saw improved scores, and 39 saw scores improve by more than 5%.
The 11th ratings of discoms have shown a marked improvement compared to the previous version. Out of the 57 state and private discoms covered, 46 improved their scores, with 39 of them improving by more than 5%. However, eight discoms saw their scores decline by over 5%.
In terms of grades, 24 discoms improved, while only one was downgraded. The number of discoms awarded a grade of C or lower decreased from 35 to 21. Eleven discoms achieved an A+ rating, including private utilities under Adani Electricity Mumbai Limited, Noida Power Company Limited, Tata Power Limited - Mumbai, and TP Western Odisha Distribution Limited; four state-owned discoms from Gujarat and two from Haryana; and DNH Power Distribution Corporation Limited.
Reduced AT&C losses, improved reliability
These discoms have been able to make a significant impact on the electricity sector in India. They have been able to reduce the AT&C losses in their distribution networks, which has resulted in a more efficient and reliable supply of electricity to consumers.
One of the reasons why these discoms have been able to achieve such success is their focus on technology. They have invested in smart grids, which allow for real-time monitoring of the distribution network. This has helped them to identify and rectify faults quickly, which has resulted in a more reliable supply of electricity.
These discoms have also focused on customer service. They have implemented various initiatives to improve customer satisfaction, such as online bill payment and customer care centers.
McKinsey & Company has prepared the rating report, which assesses the past three financial years from 2019-2020 to 2022-2023. For FY 2022, PFC and McKinsey jointly prepared the report. Moreover, REC and E&Y conducted a study that forms the basis for the Discom rating for Consumer Services for FY 2022. These ratings and rankings crucially promote efficiency, accountability, and transparency in the power distribution sector, and allow customers to make informed choices.
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