Feasibility & Indexation of DISCOMs Viable for Privatisation in India

State-Wise Examination Upon Financial & Operational Parameters - Examination of Distribution Utilities Suitable for Privatization Under Different Models as Per Sbd

The State Electricity Regulatory Commissions (SERCs) do have an ownership for most of the power distribution utilities performing well below par with almost 15 state discoms still have loss levels in excess of 25% and 7 of them have it higher than that of 30% still. Therefore, arguably the role of electricity regulators in India becomes equally important in terms of having a collaborative approach to bring the desired autonomy in the functioning of the discoms which is on priority to deal with the systemic challenge of formulating tariff orders on time.

The delay leads to a deferment in the tariff hikes which cascades into inability of discoms to get the desired revenue for the fiscal, thereby inflating the ACSARR gap furthermore. Also, the penetration of distributed generation is only going to increase given the fact that solar is becoming cheaper only and with the advent of battery energy storage technologies now and attaining economic sustainability in near future the woes of discoms shall further worsen as exodus of retail consumers shall continue to exist. Therefore an adaptive privatization model transcends as need of the hour basis the utilities structure and operation and can vary from licensing, franchisee and a profit-sharing model.