HP water cess on hydropower generation to cost Punjab Rs 484 cr

Tribune News Service

Aman Sood

Patiala, March 17

Punjab and Himachal Pradesh are likely to lock horns over a recent decision of the hill state to impose a water cess on the hydropower generation on its turf. The Punjab State Power Corporation (PSPCL) is “legally examining” the decision.

Should find out amicable solution

The HP Government cannot levy cess like this on power projects. A state should not burden other state and the decision will only make power costly in Punjab. The matter needs to be taken up for discussion between two governments for an amicable solution —VK Gupta, power engineers federation

Senior PSPCL officials said the Himachal Pradesh Water Cess on Hydropower Generation Bill 2023, introduced on Tuesday in the Himachal Vidhan Sabha, will burden the already cash-strapped PSPCL by over Rs 484 crore per annum.

Punjab has one hydropower project in addition to its stake in the Bhakra Beas Management Board (BBMB). The water cess will now be collected by the Himachal Government keeping in view the size of the project and other parameters.

“The power rates will go up by Re 1 per unit, if it becomes a reality, making it tough for Punjab to continue subsidies for various categories,’’ say PSPCL officials.

Punjab owns 110 MW Shanan Power Project, 2 km from Jogindernagar, in Himachal Pradesh and by initial assessments, Rs 23.16 crore per annum will be the cess. Meanwhile, the BBMB, which supplies power to Punjab, Haryana, Rajasthan and Himachal Pradesh, will also have to bear the financial burden of Rs 1,100 crore, which will be passed on to its partner states. “Punjab will have to share Rs 461 crore as cess per annum on this,” read data prepared by the PSPCL.

“The decision by Himachal is against the principles of the riparian water rights. It will burden Punjab by around Rs 484 crore per annum. We are legally examining the issue and will move further on this based on the legal advice,” said Minister for Power Harbhajan Singh. “We will not let the new cess burden Punjab. Power at minimum rates for farmers, the industry and domestic consumers is important,” he said.

The Bill in the Vidhan Sabha is aimed to raise Rs 4,000 crore per annum through the cess payable on the water being utilised by the power generation companies, which have projects in the state. Recently, the Congress formed the government in the hill state.

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