ANNOUNCEMENTS
The performance and financial viability of India’s electricity distribution sector are increasingly influenced by capital expenditure (CAPEX) planning, regulatory accountability and efficiency in infrastructure deployment. This study undertakes a prudence check of the capital expenditure incurred by the Mangalore Electricity Supply Company Limited (MESCOM) during the financial year 2023-24. It aligns the evaluation with the frameworks outlined in the Multi-Year Tariff (MYT) regulations of the Karnataka Electricity Regulatory Commission (KERC), the technical standards issued by the Central Electricity Authority (CEA) and the performance-driven funding model of the Revamped Distribution Sector Scheme (RDSS).
The core objective is to assess whether the investments made by MESCOM covering key assets like distribution transformers, capacitor banks, underground cables and smart meters were planned and executed in a technically justified, cost-effective and regulation compliant manner. Using data drawn from MESCOM’s Detailed Project Reports (DPRs), quarterly progress reports and internal monitoring dashboards, the study conducts a comparative analysis of system performance indicators such as AT&C loss reduction, voltage stability, transformer loading, and power factor improvement before and after asset commissioning. Capital budgeting efficiency is further evaluated using industry benchmark comparisons, per-unit asset cost deviations and observed vs. allocated utilization rates.
The literature review frames MESCOM’s performance within the national reform landscape, including legacy schemes such as RDSS and identifies persistent gaps in utility level execution, despite clear regulatory and technical benchmarks. Empirical analysis reveals that MESCOM demonstrated high compliance with cost efficiency (average 96–98% fund utilization) and achieved measurable improvements in grid reliability, particularly in divisions like Udupi, Shivamogga and Mangaluru. Nonetheless, challenges remain in optimizing procurement processes and synchronizing execution timelines with outcome-based RDSS milestones.
Keywords: Capital Expenditure, MYT, Cost Efficiency, Energy Efficiency.
