Free power to farmers may face regulatory panel hurdle

PATIALA : With the state government having failed to pay the power subsidy bill to the Punjab State Power Corporation Limited (PSPCL), free electricity to farmers may hit regulatory hurdle this year as norms do not permit carrying forward of this bill.

For issuing the tariff order, the Punjab State Electricity Regulatory Commission (PSERC) had completed the procedure, which included the PSPCL’s annual performance review (APR) petition and holding of public hearings, with a decision on subsidy pending.

In the previous tariff orders, the regulator had been working out the subsidy amount payable on the basis of subsidy already being given and on the assumption that the same will be continued. The commission then sends a communication to state government giving details of the subsidy payable and seeking the latter’s confirmation whether the amount should be recovered from consumers or the government will pay the subsidy.

On the basis of the state government’s reply, the PSERC will incorporate whether the tariffs will be charged from consumers or not in order to be issued.

The government has failed to pay subsidy as per the commission order and the subsidy arrears have shot up from ₹2,909 crore on March 31, 2017, to an estimated ₹5,500 crore.

Thus, the subsidy amount payable for the upcoming 2018-19 fiscal will be somewhere between ₹13,000 and ₹14,000 crore, including the arrear.

“PSERC is bound by Section 65 of the Electricity Act which requires it to order the recovery of full/unsubsidised tariff in case of default. It also has a compulsory provision for advance payment of subsidy. If the commission orders that subsidy arrears of 2017-18 be recovered/paid during 2018-19, it will be a contradiction of Section 65 provision of advance payment,” said a PSERC official. Secretary, finance, Anirudh Tiwari could not be contacted for comments.

GOVT HAS FAILED TO PAY SUBSIDY AND ARREARS HAVE SHOT UP FROM ₹2,909 CRORE ON MARCH 31, 2017, TO ₹5,500 CRORE NOW