Centre tells Punjab to release revised power tariff at earliest

ACCORDING TO THE NORMS, THE NEW TARIFF SHOULD BE DECLARED BEFORE THE END OF THE LAST FISCAL

PATIALA: The Union power ministry has told the Punjab State Electricity Regulatory Commission (PSERC) and state additional chief secretary (power) to finalise the tariff for the current financial year at the earliest.

PSERC held its last public hearing in the last week of April, but it is yet to announce the tariff for the current fiscal.

Twenty states, including neighbouring Haryana and Himachal, have already declared their respective power tariffs for the current fiscal, while Punjab and some other states are yet to finalise the same. Reminding of its old directions, the Union ministry has sought completion of the process at the earliest.

According to the norms, the new tariff should be declared before the end of the last fiscal.

PSPCL’S flip-flop

Punjab State Power Corporation Limited (PSPCL) filed its annual revenue requirement (ARR) petition in December 2020. However, it made a flip-flop as after asking for a tariff hike of 9%, it filed an amended ARR seeking rebate in the tariff — a move seen as an inference of the state government as assembly elections are due in the latter part of current fiscal.

In its revised ARR, the PSPCL has proposed a 32% cut in domestic consumer tariff for those with less than 7KW connected load.

Further, it proposed that cumulative revenue gap of ₹9,807 crore at the end of 2021-22 shall be treated as a regulatory asset that may be recovered over the next two to five years. A major chunk of revenue goes to fixed costs of the private thermal plants, but when the power demand dips after the paddy season, PSPCL is forced to pay the fixed cost even without drawing electricity.

As per PSERC regulations, the regulatory asset shall have to be recovered within the next three financial years.

Don’t create regulatory assets, states told

In a letter issued on May 3 to the states, the Union ministry has also asked the latter not to create the regulatory assets.

“The Punjab government charges 20% excise duty on the tariff which is more than ₹1.25 per unit. In case the state wants to give relief to a section of domestic consumers, it should reduce the excise duty for such category of consumers. It should not ask for regulatory assets which shall be passed on to the consumers at a later stage. It will give a major jolt to consumers after elections,” said VK Gupta, spokesperson of All India Power Engineers’ Federation. This implies that the burden on consumers has only been deferred to a future date.

Moreover, PSPCL is to pay coal washing charges in two instalments to the private thermal plants at Rajpura and Talwandi Sabo.

One instalment has already been paid and the second is to be given before month-end. This may be recovered by way of fuel charges.

Pendency of arrears

As per estimates, the power subsidy amount during 2021-22 is likely to be of the order of ₹17,000 crore, including pending arrears of ₹5,779 crore, whereas Punjab has earmarked only ₹10,621 crore for subsidy payment in its budget for 2021-22.

The consistent pendency of arrears towards Punjab government is becoming the biggest threat to the survival of PSPCL.

Meanwhile, a PSERC official said the new chairman has assumed the charge and has initiated the process of finalising the tariff, which likely to be announced by the end of this month.