PSPCL feels the heat as consumers make beeline to avail power subsidies

Aman Sood

Patiala, December 7

Last year, when the previous government announced a rebate of Rs 3 per unit up to 7 KW load, many consumers reduced their load to below 7 KW to get relief. This year, the rebate of up to 600 units of domestic power in the bi-monthly billing announced by the AAP government was implemented from July onwards.

Consumers cite family dispute

We have received applications for a new connection, with the applicant claiming that his son troubles him. Though we have asked our officials to be strict, there is little we can do when consumers cite family dispute as the reason. PSPCL official

To avail this benefit, more than 75,000 domestic connections have been bifurcated. The domestic consumers, along with the subsidised agriculture sector, are taking a financial toll on the health of the Punjab State Power Corporation Limited (PSPCL).

The state government claims that the number of zero domestic bills has touched more than 90 per cent of the total domestic consumers and with others getting Rs 3 per unit relief, the total subsidised domestic consumers are almost 98 per cent.

“This means that the PSPCL is heavily dependent on the subsidy amount that the government releases in lieu of various subsidies,” a senior PSPCL official said.

In the majority of cases, the applicants already with a connection have applied for a new one on the pretext of another family living on the same premises.

“In certain cases, we have received applications for a new connection, with the applicant claiming that his son troubles him. Many others have claimed marital or property disputes,” said a top-level PSPCL official.

“Though we have asked our officers to be strict while releasing the new connections, there is little we can do when consumers state family dispute as the reason for a new connection,” a senior PSPCL official said.

Power experts said the new scheme would discourage energy conservation.

“The majority of households consuming 200 units earlier will now increase the power consumption. This will add to the financial strain on the government as the same house will consume more power, but would keep it under 300 units a month,” the experts said.

The PSPCL had already been taking short-term and long-term loans to meet the day-to-day expenses in face of revenue loss.

The state government budget only provided for the subsidy due this year while the arrears of Rs 9,000 crores from last year, if not paid, will hit the PSPCL financially.

Moreover, the loss of revenue from the free supply is estimated at Rs 1,800 crore (Rs 200 crore per month). This loss of revenue is increasing every month, which will be transferred to the next year as arrears.

The spokesperson for the All-India Power Engineers Federation, VK Gupta, said, “The rising debt means the PSPCL will be solely dependent on subsidies by the state government. From the next financial year, the Centre seeks to roll back the states’ ability to borrow from the state’s share of borrowing, including those to undertake power sector reforms, which is likely to be capped at 3.5 per cent of their GDP as against the current 4 per cent. This would mean less headroom to borrow, especially at a time when revenues are falling.”

The PSPCL, this year, has slipped to ‘B’ grade from ‘A’ as per the 10th annual ranking report for financial year 2020-21. The PSPCL is now placed 16th in the current ranking. The rising debt is hampering any developmental works or even regular maintenance works.

As per the report, the PSPCL’s areas of concern are high-operation and maintenance cost, low debt service ratio, average collection efficiency of 94.9 per cent delay in tariff timeline and improvement in corporate governance.

Power discom facing loss of over Rs 1,880 cr

• Compared to 2.2 lakh new domestic connections released till Sept in 2021, this year, 2.94 lakh were released during this period
• 87% of the total 74L domestic consumers in Punjab received zero bills in Nov
• The state govt has told the PSPCL that it will pay Rs 15,845 cr as ‘power subsidy’ for the current year; the subsidy, however, is likely to cross Rs 18,000 cr
• The PSPCL, at present, is facing a loss of over Rs 1,880 cr against a profit of Rs 1,069 cr it generated in March 2022