The Comptroller and Auditor General (CAG) will conduct a nationwide performance audit of electricity distribution companies (DISCOMs) to assess whether their financial and operational weaknesses are affecting the quality and affordability of power supply, even as governments continue to pump money into the sector. Private DISCOMs, however, have been excluded from the exercise.The four-year integrated audit of the power sector will prioritise electricity distribution in its first year, with a particular focus on procurement practices, demand forecasting, metering, billing and collection efficiency, regulatory accounting and consumer services.The exercise comes amid mounting financial stress in the distribution sector. According to data cited in the CAG’s press brief, 24 DISCOMs had a negative net worth as of March 2025, while their accumulated losses stood at Rs 3.41 lakh crore. Their outstanding borrowings amounted to Rs 7.26 lakh crore, attracting an annual interest burden of Rs 77,653 crore.The financial position of distribution utilities remains uneven. While 41 DISCOMs reported aggregate profits of Rs 32,661 crore in 2024-25, another 23 recorded combined losses of Rs 29,959 crore.The audit will also examine why increasing government support has not translated into stronger financial health of DISCOMs. Between 2020-21 and 2024-25, revenue grants to the utilities increased by 69.4 per cent, while capital grants rose by 16 per cent.The exercise will also assess consumer satisfaction across domestic, industrial, commercial and agricultural categories. Auditors will examine the quality of electricity supply, billing and collection efficiency, and aggregate technical and commercial (AT&C) losses.The national average AT&C loss stood at 15.04 per cent in 2024-25, marginally above the Revamped Distribution Sector Scheme (RDSS) target range of 12-15 per cent. As many as 27 DISCOMs failed to meet the prescribed benchmarks, with losses varying widely across states, from 3.63 to 48.86 per cent.Power procurement, including purchases through electricity exchanges, will also come under scrutiny, along with the implementation of the Centre’s RDSS.The audit findings will be presented to the respective state legislatures, while common systemic shortcomings will be consolidated for the Union Ministry of Power for consideration of policy interventions.