The 12th integrated rating report of discoms, revealing substantial advancements in the efficiency and financial aspects of the power distribution sector, was unveiled by R.K. Singh, Union Minister for Power and New & Renewable Energy. According to the report, the aggregate technical & commercial (AT&C) losses had been reduced to 15.4% in the fiscal year 2023, with Billing Efficiency reaching 87.0%. Moreover, the collection efficiency demonstrated strength at 97.3%. The sector's financial burden reduction has been attributed to the enforcement of late payment surcharge regulations, which resulted in a decline in payables to generation and transmission companies. This financial discipline is evident from the reduced days payable to 126 days and days receivable to 119 days. Furthermore, state governments have played a pivotal role by disbursing 108% of the allocated amounts for tariff subsidies in FY23, alongside providing subsidy grants amounting to Rs 440 billion to offset discoms' financial losses. However, the report also pointed out challenges, such as a 71 paise increase in the average power purchase cost per kWh during FY23, driven by an 8% surge in power demand, escalated costs for coal imports, and elevated exchange prices during peak summer. Consequently, the ACS-ARR gap, indicating the cash-adjusted gap per unit of energy, widened to 55 paise per kWh, mainly due to the incomplete transfer of purchase costs to consumers. Initiated in 2012, the integrated rating exercise evaluates the performance of power distribution utilities annually, based on a methodology approved by the Ministry of Power. Conducted with the Power Finance Corporation as the nodal agency, this exercise has adapted to reflect changes in the power sector and national priorities, emphasising an accurate financial picture, the impact of the external environment, and adherence to sectoral best practices. The 12th edition maintained the comprehensive rating framework established in the previous year, intending to capture discoms' performance changes accurately. The evaluation criteria encompass 15 base metrics and nine disincentives, providing a score out of 100 to thoroughly assess a discom's performance. Based on this integrated rating score and specific overriding conditions, each discom is assigned a grade from A+ to D, offering clear insights into their operational and financial status.