CAG begins nationwide audit of 39 power discoms, to examine consumer satisfaction and short-term power procurement

The Comptroller and Auditor General of India (CAG) has commenced an audit of 39 state-owned power distribution companies (discoms) in India, with a focus on consumer satisfaction and short-term power procurement practices. Unlike previous audits that examined discoms individually in different states, this audit unifies 39 discoms and five government department undertakings under a single audit.

The initiative is part of the CAG's plan to conduct an integrated audit of the power sector, expected to complete by mid-next financial year. The audit is being conducted by the State Commercial Audit division, set up last year to focus on state-owned public sector enterprises. The audit's primary objective is to evaluate the financial health and sustainability of discoms, with a particular emphasis on consumer satisfaction.

To gauge consumer satisfaction, the CAG plans to conduct a survey covering around 10,000 consumers across various categories, including domestic, industrial, commercial, and agricultural consumers. The audit will also assess power procurement practices, with a focus on the increasing share of short-term power procurement in the power purchase basket of states, which has risen from around 7-8% to 14% in the past five years.

Officials aim to determine the robustness of demand forecasting systems and the efficiency of market timing by state entities. The integrated auditing approach is intended to provide a more comprehensive understanding of how different parts of the power sector operate collectively, potentially identifying irregularities that may not emerge in isolated audits.