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					</table><p>Punjab, Karnataka, and Maharashtra have topped the list of states in the first-ever assessment of regulatory performance in the power sector, with scores of 97, 96, and 94 out of 100, respectively.</p>
<p>Assam and Arunachal Pradesh rounded off the top five with scores of 93 and 91, respectively, according to the “Rating Regulatory Performance of States and Union Territories 2025” report released jointly by the Power Foundation of India (<a href="https://www.powerfoundation.org.in/" target="_blank" rel="noopener">PFI</a>) and <a href="https://recindia.nic.in/" target="_blank" rel="noopener">REC</a>.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-90780 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking.png" alt="" width="791" height="1007" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking.png 791w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking-236x300.png 236w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking-768x978.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking-650x827.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking-624x794.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/regualtory-ranking-600x764.png 600w" sizes="auto, (max-width: 791px) 100vw, 791px" /></a></p>
<p>The report presents a structured, evidence-based assessment of the regulatory performance of states and union territories (UT), focusing on the effectiveness of electricity regulation in ensuring reliable, affordable, consumer-centric, and sustainable power supply.</p>
<p>The rating exercise reviews the regulatory performance on a 100-point scale. The performance is assessed based on a set of core parameters covering resource adequacy (32 marks), financial sustainability (25), ease of doing business (23), energy transition (15), and regulatory governance (5). The evaluation is based on verifiable regulatory instruments, including tariff orders, true-up orders, regulations, and rules issued up to June 30, 2025.</p>
<p>Based on their overall scores, the states and UTs have been categorized into performance grades A, B, C, D, and E. According to the report, 21 states and UTs achieved A and B grades, demonstrating strong regulatory practices, marked by timely tariff determination, cost-reflective tariffs, improved consumer service standards, and proactive support for renewable energy integration.</p>
<p>The report highlighted strong performance across several states and identified gaps that warrant greater attention and institutional strengthening. “The objective of this exercise is not to rank for competition, but to enable cross-learning, promote adoption of best practices, and encourage the development of a consistent, predictable, and consumer-centric regulatory environment across the country,” it said.</p>
<p>The Ministry of Power’s annual <a href="https://www.mercomindia.com/power-sector-reforms-help-discoms-post-profits-in-fy-2025-for-first-time" target="_blank" rel="noopener">ratings</a> for government and private power utilities focus mainly on financial performance, whereas the PFI-REC report focuses on how the state electricity regulatory commissions are enforcing energy transition mandates, such as renewable procurement obligations and green energy open access, formulating resource adequacy plans, and protecting consumer rights.</p>
<p>In all, 11 states and UTs received an A grade (85 marks and above), 10 received a B grade, 10 received a C grade, 4 received a D grade, and 1 received an E grade.</p>
<p>Punjab scored 32/32 for reliability of power supply, 25/25 for the financial health of distribution companies (DISCOMs), 23/23 for ease of business, 12/15 for energy transition, and 5/5 for regulatory governance.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard.jpg"><img loading="lazy" decoding="async" class="aligncenter wp-image-90775 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard.jpg" alt="Punjab Regulatory Performance Scorecard" width="1145" height="1531" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard.jpg 1145w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard-224x300.jpg 224w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard-768x1027.jpg 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard-650x869.jpg 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard-624x834.jpg 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Punjab-Regulatory-Performance-Scorecard-600x802.jpg 600w" sizes="auto, (max-width: 1145px) 100vw, 1145px" /></a></p>
<p>&nbsp;</p>
<p>Renewables-rich Rajasthan fared poorly with a total score of 39/100 and a D grade. Andhra Pradesh, Tamil Nadu, Telangana, and West Bengal were graded C, while Gujarat and Odisha got a B rating. Gujarat scored just 10/32 for resource adequacy.</p>
<p>The report noted that many top-performing states complied with Green Energy Open Access Rules and Renewable Purchase Obligation trajectories notified by the Ministry of Power. Compliance among the laggard states on these parameters was mixed.</p>
<p>The PFI-REC report also highlighted that the DISCOMs continued to incur losses, with the accumulated losses climbing to ₹6.47 trillion (~$71.35 billion) in the financial year (FY) 2024-25. Aggregate Technical and Commercial losses, however, improved to 15.04% in FY 2024-25.</p>


Punjab Tops India’s First Regulatory Performance Rankings in Power Sector


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					</table><p>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> has asserted that government-owned distribution companies (DISCOM) will continue to operate alongside private licensees in a regulated, level-playing environment, while referring to the Electricity (Amendment) Bill, 2025.</p>
<p>It said the proposed reforms will be implemented in consultation with the states and will preserve the federal balance.</p>
<p>“The Bill is a progressive reform aimed at strengthening the power distribution sector through financial discipline, healthy competition, and enhanced efficiency,” the Ministry said.</p>
<p>It stated that the Bill promotes healthy competition between government DISCOMs and private licensees under the supervision of the state electricity regulatory commissions (SERC).  “This will mean better service, greater efficiency, and real choice for consumers.  It helps government and private utilities compete on performance, turning monopoly supply into efficient, accountable, and consumer-friendly service.”</p>
<p>Seeking to allay concerns about the cherry-picking of distribution jurisdictions by private licensees, the Ministry stated that each distribution license covers all consumers within the SERC-defined distribution area. Regulators will set cost-reflective tariffs for all distribution licensees as <a href="https://www.mercomindia.com/government-proposes-cost-reflective-power-tariffs-in-draft-amendment-bill" target="_blank" rel="noopener">proposed</a> in the Bill.</p>
<p>The Universal Service Obligation (USO) will apply to all licensees, meaning every supplier must serve all consumers in its area without discrimination.</p>
<p>The Bill also allows SERCs to dispense with the USO for large consumers (&gt;1 MW) who are currently eligible for open access.  These large consumers can procure their own power through open access without DISCOM support.</p>
<p>Addressing the question of cost-reflective tariffs for farmers and other consumers, the Ministry stated that competition will reduce the overall cost of electricity supply by improving efficiency and accountability in the supply chain.</p>
<p>In August, the Supreme Court <a href="https://www.mercomindia.com/supreme-court-orders-pay-dues-discoms-four-years" target="_blank" rel="noopener">emphasized</a> that Sections 61 and 62 of the Electricity Act impose a clear obligation on regulators to determine tariffs that are cost-reflective and provide a reasonable return to distribution licensees, while ensuring the protection of consumer interests.</p>
<p>The Ministry said shared network usage will eliminate duplication of distribution lines and substations. “Under the monopoly electricity supply model, technical and commercial losses are high and often merged under one head, masking inefficiencies and theft.  When state governments provide subsidized electricity to segments like farmers or domestic consumers, the subsidy burden includes not only the intended social support but also the cost of monopoly operations.”</p>
<p>It added that by enabling shared network usage and facilitating competition, the reforms proposed in the Bill will reduce losses and lower the effective subsidy burden on state governments, without altering the subsidized tariffs paid by consumers.</p>
<p>The Ministry stated that the Bill proposes that SERCs will determine cost-reflective wheeling charges.  All distribution network users, whether public or private, will pay these regulated charges.  The collected charges will then be shared fairly among licensees based on network ownership.</p>
<p>It noted that India already has a successful model of an interstate transmission system operating on shared infrastructure.</p>
<p>The Ministry also asserted that the Bill does not disturb the federal balance or erode the autonomy of the states. Since electricity is a subject of both the Union government and the states, both have the power to legislate. The Bill envisages implementation of reforms through a consultative process between them.</p>
<p>“The proposed Electricity Council will serve as a consultative body to build policy consensus.  At the same time, SERCs will continue to determine tariffs, issue licenses, and regulate intrastate activities,” it said.</p>


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