In election year, power tariff hike unlikely

Ruchika M Khanna

Tribune News Service

Chandigarh, July 26

With Vidhan Sabha elections round the corner, the Punjab State Electricity Regulatory Commission (PSERC) is unlikely to announce a major hike in the power tariff for 2016-17.

However, it is likely give its nod to the huge power subsidy bill of over Rs 7,000 crore for farmers, those below the poverty line and socially backward classes. The new tariff order will be announced on Wednesday.

Sources in the power utilities say that being an election year and the government on a sop-giving spree it is unlikely that any changes in the existing power tariff will be made.

Though the state recently signed the UDAY (Ujjwal Discom Assurance Yojana) scheme and it specifies the increase in the tariff by a minimum of five per cent, sources privy to the new tariff order say it is unlikely that the hike will touch five per cent.

Last year too the state power regulator had not announced any hike in the tariff.

While the tariff is unlikely to see any major change, the total subsidy bill is likely to swell to Rs 7,000 crore to Rs 7,500 crore.

Last year, the power subsidy okayed by the power regulator was Rs 6,000 crore and this year it will increase substantially because 2.50 lakh new tubewell connections were released (1.85 lakh connections released in 2015-16 and about 1 lakh connections being released now).

Sources said that 85,000 test reports (final report for release of a tubewell connection) have been received by the PSPCL. Another reason will be the massive increase in the BPL card holders in the state – another of the state government’s ploy to dole sops in hope of garnering votes - in the polls.

The state has decided to increase the BPL card holders by 7 lakh people. This means that these people too will be entitled to power subsidy hiking the total subsidy bill.

While AP (Agriculture pumpset) consumers do not pay for any power consumed, the BPL and SC consumers get 200 units of free power.

Interestingly, though the government was committed to pay the subsidy of over Rs 7,000 crore to PSERC, it is yet to clear the last fiscal’s subsidy with dues of Rs 1,200 crore still pending.

Even the government’s departments owe Rs 600 crore. This financial management, to be revealed when the new tariff order is announced, is likely to reveal the financial health of the PSPCL- which till two years ago enjoyed top ranking on the financial account.