Chandigarh, July 13
In what may spell trouble for the already tottering power sector in Punjab, the Punjab State Electricity Board and the Punjab State Electricity Regulatory Commission have locked horns. The commission has decided to impose a financial cut of Rs 4,748 crore on the PSEB and has started fixing power tariffs on its own. The PSEB decided to protest this move yesterday.

The commission has conveyed to the board that cuts will be imposed on allocations for the purchase of additional power required during peak time and expenses accruing to maintain an army of employees while the purchase of coal will be rationalised. It has added that huge payments of interest on borrowings will have to be curbed.

A formal protest will be lodged in the next few days on the formula adopted to impose cuts, sources say. The commission is headed by former state chief secretary Jai Singh Gill while Y.S. Ratra, another former chief secretary, heads the PSEB.

Senior PSEB functionaries made it clear at a high-level meeting of the board yesterday that this move of the commission would ‘kill the power sector’. They added that the move of the commission was ‘far removed from ground realities’.

On the other hand, engineers say a political decision is urgently required to sort out issues plaguing the financial health of the PSEB, like free power to farmers.

The commission made a suo motu move a few days ago when the PSEB failed to submit the mandatory annual revenue requirement estimate due in November last year.

The commission has said that it will cut Rs 993 crore from the allocated funds for the purchase of coal saying the board is consuming too much of coal at its thermal plants. The PSEB engineers opine coal is being purchased from Coal India Limited and it is actually consumed to produce electricity. Any cut into this will prove disastrous for the board.

The commission says it will not approve anything more than Rs 2,800 crore for the purchase of extra power to meet peak period. Last year, the PSEB spent Rs 4,200 crore on purchasing power from outside sources. This means a cut of Rs 1,400 cut will be imposed on the purchase of power alone.