Discoms in Punjab and Maha led turnaround in power sector fortunes

NEW DELHI: Record profits at Maharashtra and Punjab's power distribution companies, backed by strong showings of a handful of other govt and almost all private discoms, dragged the sector out of the red, turning a Rs 27,022 crore combined loss last financial year into a Rs 2,701 crore profit in FY2024-25 (FY25).Though India's power distributors have posted a profit at last ending a long season of losses, the needle of the accumulated losses over the last two decades of all power utilities have only moved slightly from Rs 6.9 lakh crore loss in FY 2023-24 to Rs 6.5 lakh crore in FY 2024-25. Outstanding loans, which includes the borrowings from state govts, fell to Rs 7.3 lakh crore in 2024-25 from Rs 7.6 lakh crore in the previous fiscal, according to the report prepared by Union ministry of power. Of the 42 state-owned discoms that were rated, 25 posted profit in FY25.Timely subsidies, improved revenue help Punjab power corp post 677% profit jumpPunjab State Power Corporation Limited (PSPCL), which caters to nearly 95 lakh consumers in the agrarian state, led the pack by posting a 677% jump in profits, largely due to the timely release of subsidies and improved revenue.The discoms of North Bihar and South Bihar, Ajmer, Tamil Nadu and Paschim Gujarat also helped the sector record cumulative profits for the first time since the corporatisation of state electricity boards.Of 72 state-run and private discoms and power departments, the govt looked at the data of 65 — to arrive at these figures. The data of seven discoms — four private, two state-owned and one power departments — was not available. State electricity boards in Maharashtra, Kerala, Himachal Pradesh, Madhya Pradesh Paschim, Manipur and Jodhpur emerged from losses reported a year earlier and registered healthy net profits in FY25. All 12 private discoms that govt rated were in profit, as always.According to the govt’s 14th Integrated Rating and Ranking Report, despite posting healthy net profits, the losses incurred by Punjab’s discoms due to energy lost during transmission, theft, metering losses and billing inefficiencies (known as AT&C) rose from nearly 11% in 2023-24 to 19.2% a year later.In contrast, similar losses declined in Maharashtra (from 23.9% in FY24 to 17.7% in FY25), Bihar (from 20.3% to 15.5%) and Kerala (from 7.4% to 6.6%). Overall AT&C losses also fell from 16% to 15%.Power minister Manohar Lal Khattar, at an industry event last week, attributed the turnaround to the release of subsidies accumulated over the years by respective state govts and the recovery of dues.“Many states were not releasing subsidy amounts on time. We made sustained efforts over the past year, which led some states to fast-track the payments. This became a major reason for discoms turning profitable,” Khattar said.Billing efficiency improved across 46 utilities, while better collection efficiency was recorded for 29 discoms. The four power distribution companies of Gujarat were the only state-run utilities to report accumulated surpluses, apart from private discoms.