PSPCL seeks 11% tariff hike for next fiscal

Aman Sood

Patiala, December 14

In the coming fiscal, power consumers can face a ‘bare minimal’ power tariff hike, awaiting approval of the Punjab State Electricity Regulatory Commission (PSERC). However, the annual power subsidy for the state is likely to touch Rs 22,000 crore in the next fiscal, as per the Annual Revenue Requirement (ARR).

In the petition filed with the power regulator for ARR against 2024-25, the Punjab State Power Corporation Limited (PSPCL) has sought 11 per cent increase in the ARR, which is the lowest percentage increase sought in the last 15 years. However, given the parliamentary elections due next year, a tariff hike looks highly unlikely even as the regulator announces the tariff for next year by or before March 31 every year.

According to the information gathered by The Tribune, the power regulator will now hold public hearings, after inviting objections against the ARR filed by the PSPCL till November 30. As per submissions, during 2024-25, there will be a surplus of Rs 1,500 crore against revenue requirement of Rs 46,000 crore.

The PSPCL has sought 11 per cent increase, lowest percentage increase in the past 15 years. The total power subsidy is estimated at Rs 22,000 crore, of which Rs 9,000 crore are for domestic consumers on account of the 300 units free per month, Rs 3,000 crore for the industrial sector and Rs 10,000 cr for agriculture pumps.

Further, during 2022-23, power purchase cost shot up by Rs 4,000 crore due to ‘forced use of imported coal’, Rs 600 crore increase in transmission charges and Rs 1,700 crore due to implementation of the sixth pay commission. “Out of Rs 46,000 crore revenue requirement for 2024-25, Rs 30,000 crore is power purchase cost, Rs 4,000 crore fuel cost, Rs 2,000 crore transmission charges and Rs 7,000 crore as employee cost,” said sources.

“The Punjab Government paid a subsidy of Rs 20,200 crore during 2022-23 and Rs 14,500 crore so far during 2023-24, paving way for better finances with the PSPCL,” said a senior official, privy to the developments.

During 2023-24, the PSPCL has cut its power purchase and generation costs considerably by putting its foot down against the use of imported coal due to operationalisation of Pachhwara coal mine and selling substantial power in exchange, thereby earning a profit of Rs 500 crore in the first half of the year.

“The PSPCL financial position can improve further if power theft worth Rs 2,000 crore is curbed and the pending power bills worth Rs 3,500 crore of government departments are paid,” said All India Power Engineers Federation spokesman VK Gupta.

As per the past practice, the PSERC would analyse and apply prudent checks on the PSPCL submissions and shall decide the tariff before March 31, 2024.