PSPCL seeks regulator nod to another hike in power tariff

Increase came in Oct, too, with effect from Apr last year

IT WILL NOT ONLY MEAN HIGHER BILLS FOR MOST CONSUMERS, BUT ALSO ADD TO BURDEN OF GOVT FOR GIVING POWER AT SUBSIDED RATE OF ~5 A UNIT TO INDUSTRY

CHANDIGARH : The Punjab State Power Corporation Limited (PSPCL) has proposed a hike of at least 17% in tariff for the next financial year, 2018-19. If it is allowed by the Punjab State Electricity Regulatory Commission (PSERC), making it applicable from April 1, it will not only mean steeper bills for consumers, but also add to the burden of the government for a subsided rate of Rs 5 a unit to industry.

The government last week conveyed to the PSERC that it is giving Rs 748 crore to the state power department as compensation for industrial supply at Rs 5 a unit and for taking up 50% of the arrears of hike announced in October last year for the current year beginning April 1, 2017. Of the Rs 748 crore, Rs 300 crore is the 50% of arrears, and the remaining Rs 448 crore is for maintaining supply at Rs 5 a unit.

Over and above the recently promised subsidy, the government had to pay Rs 10,917 crore in the current year for free power various segments, such as agricultural pumpsets (Rs 5,976.8 crore), Scheduled Castes consumers (Rs 1,209.04 crore), Backward Classes consumers (Rs 707.98), freedom fighters (Rs 83 lakh), new industry (Rs 108 crore), and Rs 2,909 crore as balance of subsidy that was pending in the previous financial year (2016-17). The government has a chequered record of paying subsidy to the PSPCL for the discounted supply.

In an annual revenue requirement (ARR) petition filed by the PSPCL before the regulatory commission, it has shown a cumulative revenue gap of Rs 5,339 crore, meaning a hike of 17-18% for the next financial year.

The PSERC in its multi-year tariff announced in October had approved the net revenue requirement projections for three financial years, 2017-18, 2018-19 and 2019-20, at Rs 28,910 crore, Rs 30,241 crore and Rs 31,739 crore. In the revised annual revenue requirement estimates filed last week, the PSPCL demanded a net revenue requirement of Rs 33,562 crore for the forthcoming fiscal. This means a higher demand of Rs 3,321 crore, of which Rs 1,450 crore is to be paid to Bhakra Beas Management Board (BBMB) on directions of the Central Electricity Regulatory Commission (CERC).

“There is no doubt that finances in the government are tight. But we will bear the burden of promises made to different consumers sections,” said power minister Rana Gurjit Singh. He said finance minister (Manpreet Singh Badal) “knows better from where he would arrange funds”.