Every day, power consumers in Punjab are making an extra payment of Rs 2.4 crore (rs 875 crore in the year) to the Punjab State Power Corporation Limited (PSPCL) for what it is spending on the fixed charges.
The excess payment will be adjusted in the tariff for the financial year 2015-16 for which a process has already begun.
For the current fiscal 2014-15, the tariff pronounced by the Punjab State Electricity Regulatory Commission (PSERC) burdened the people of the state with fixed charges of Rs 1,706 crore, which amounts to Rs 4.66 crore every day.
In the annual requirement petition filed in November 2013 (seeking tariff for financial year 2014-15), the PSPCL had claimed that it had to surrender 12,807 million units of surplus power.
However, due to acute coal shortage from April to September 2014, hardly any power was surrendered.
In the annual revenue requirement petition filed by the PSPCL last month (seeking tariff for financial year 2015-16) it has claimed that during October 2014 to March 2015, it would surrender 6,236 million units, which includes 4,612 million units of power generated in two private thermal plants of the state at Rajpura and Talwandi Sabo.
The rest — 1,624 million units of power surrendered — is of central sector projects. The fixed charges are paid at the rate of Rs 1.34 per unit. The charges are paid as per the agreement signed by the PSPCL with the power generators.
It would lead to reduction in fixed charges from Rs 1,706 crore (for surrendering 12,807 million units) to Rs 831 crore for surrendering 6,236 million units. Thus the excess amount of Rs 875 crore charged in the current financial year would be taken into account in fixing tariff for the next financial year.
Due to the huge expenditure incurred by the PSPCL on fixed charges, the PSERC has already sounded warning bells, asking the PSPCL to come up with “concrete proposals” to deal with surplus power in its Annual Revenue Requirement (ARR) petition for 2014-15.
The PSERC has gone to the extent of suggesting reduction of power rates for high-end consumers and implementation of dynamic tariff to compete with the power exchange rates and increase power consumption from the upcoming thermal stations.
One unit of 660 megawatts of Talwandi Sabo thermal plant and two units of 700 megawatts of Rajpura thermal plant have started generating 2020 megawatts of power.
With the commissioning of the second unit of the Talwandi Sabo plant, and 540 megawatt GVK’s Goindwal Sahib plant, a total of 3,260 megawatt of power would be pumped into the system by the privately owned thermal plants, further increasing the scope for surplus power leading to fixed charges.
Fixed charges for power (2014-15)
Rs 1,706 cr for projected surrendering of 12,807 million units.
Rs 831 cr for actually surrendering of 6,236 million units.
Rs 875 cr taken in excess from consumers.