Tariff hike on cards as PSPCL seeks more funds

Strap: Demands Rs1,320 cr in ARR from regulator

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Ruchika M Khanna

Tribune News Service

Chandigarh, December 16

In the red, Punjab State Power Corporation Limited (PSPCL) has sought an additional annual revenue requirement (ARR) of Rs 1,320 crore from the Punjab State Electricity Regulatory Commission (PSERC). This, when granted, will have to be recovered by effecting a hike in power tariff for all categories of consumers.

Though the decision on this is yet to be announced by the state power regulator, a hearing regarding the same was held today.

PSPCL officials say a power tariff hike of Rs 0.02 is required for every Rs 100 increase in ARR. By this calculation, a power tariff hike of Rs 0.26 per unit will have to be imposed on consumers.

In case, the PSERC allows the additional ARR to be recovered over six months of this fiscal, the hike will be Rs 0.52 per unit. In case, it is to be recovered over two years, it will be Rs 0.13 per unit.

The petition was filed with the PSERC, asking to increase the additional ARR of Rs 1,320 crore arising out of payment to two private power producers — Rajpura Thermal Power Plant and Talwandi Sabo Power Project — as washing charges for coal.

The two had asked the discom to pay the washing charges from the time the plants became operational in 2014-15. Armed with a Supreme Court order, granting them these charges, the two companies have demanded Rs 2,700 crore from the PSPCL. While the PSPCL has already paid Rs 1,836.18 crore to the two firms, it is yet to pay Rs 1,320 crore due.

In May, the PSERC had allowed the power utility to increase the tariff, which was raised by 8 paisa per unit, while the fixed charges went up by Rs 5-10 per kilowatt across all categories of consumers.

PSPCL officials say by non-payment of power subsidy, the cash-strapped Punjab Government is milking the discom dry.

The financial health of the PSPCL has probably never been worse, with the corporation having bills worth Rs 3,387 crore pending; a monthly debt servicing of Rs 600 crore; and the banks declining to offer further loans to the corporation.

This is mainly because of government’s inability to release power subsidy, with dues accumulating to Rs 5,109.92 crore.

According to figures available with The Tribune, as against Rs 11,166.40 crore to be paid to the PSPCL by the state government, only Rs 6,056 crore has been paid.

“The state government was supposed to pay Rs 1,143.24 crore in April and May, and Rs 1,268.56 crore thereafter each month. However, considering the state’s own precarious fiscal health, this subsidy has not been paid, thus straining the PSPCL. The corporation was unable to clear the salary bill of its employees for November on time,” said a senior corporation official.

Besides, the overall fall in demand for power because of economic slowdown, has hit the discom’s income. Last year, the corporation sold power on the grid at a premium, earning a profit of Rs 450 crore.

With the overall power demand in the country down by 12 per cent, this year there are no profits to be earned through sale of power. Even the demand for power within Punjab is down by 5 per cent in the past two months (as compared to last year), which will bring down the tariff earned through sale of power.

In 2016, the PSPCL had accumulated losses worth Rs 2,800 crore. The financial turnaround of the corporation was started by the present government, and in 2018-19, the losses were brought down to Rs 38 crore only. Within a year, however, the losses have accumulated once again.

PSPCL CMD Baldev Singh Sra said the government was seized of the matter and things were being worked out to bail out the power utility.

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Will ask govt for subsidy

“We are taking up the matter with government to pay subsidy at the earliest. As for additional ARR arising out of payments made to two private power plants, we hope it will be allowed by the PSERC soon”

— Baldev Singh Sra, pspcl cmd