Power tariff order likely this month

Aman Sood

Tribune News Service

Patiala, July 31

The tariff order by the Punjab State Electricity Regulatory Commission (PSERC) may be announced in middle of August after the new PSERC Chairman takes charge. The selection process has been completed and the three-member selection committee has recommended two names for the post.

The tariff order, which is normally issued in May, has been delayed as the present chairman gave a three-month notice before leaving the job and his notice period expires on August 9. The notification regarding the appointment of new chairman is expected this week after an approval from the Governor. Many other important decisions pertaining to Punjab State Power Corporation Limited (PSPCL) are also pending in wake of the vacancy.

The state government has already announced that tariff for the sagging industrial sector would be kept at Rs 5 per unit. The PSERC has to work out a new tariff for different categories in view the constraint of keeping the industrial tariff at pre-fixed rates. The cross-subsidy is limited to 20 per cent as per existing orders.

There is already a shortfall of Rs 2,342.37 crore in the subsidy amount payable to the PSPCL by the government for the last financial year on account of free power to the agriculture sector and other categories. The subsidy on account of reduced industrial tariff will be around Rs 3,200 crore. The total subsidy for current financial year may thus cross Rs 10,000 crore. Besides, there is a difference of more than Rs 1 per unit in average cost of supply and revenue realised.

Documents accessed by The Tribune reveal that the PSPCL faces Rs 4,500-crore deficit and has already demanded a hike in power tariff based on these calculations. The subsidy bill for below poverty line (BPL) and the farm categories is already around Rs 6,400 crore and is likely to go up. However, the PSPCL faces an additional burden of Rs 300 crore due to the recent release of tube-well connections in villages across the state in the run up to the elections.

“In 2016, the PSPCL took a loan of Rs 2,000 crore to manage its expenditures following government’s failure to clear pending dues,” read the documents. The PSPCL faces a mounting debt of over Rs 25,900 crore and manages on loans to run its state of affairs. The PSPCL in its petition to the PSERC wanted to hike power rates by 28 per cent.