A day after the Patiala and Talwandi Sabo bypoll, the Punjab State Regulatory Commission (PSERC) on Friday announced a hike in power tariff for the financial year 2014-15.
The new tariff order was a bag full of surprises as the agriculture tariff witnessed an increase of 7.29% whereas there was a negligible hike of up to 2% for all other consumer sections.
The hike will be effective with retrospective effect from April 1, 2014. It may be the lowest hike in the past 12 tariff orders, but the Punjab State Power Corporation Limited (PSPCL) says the tariff order has tried to scuttle their operations as the fuel supply adjustments have been withdrawn and it is effectively a "zero" hike.
For domestic consumers using power up to 100 units in a billing cycle, no hike has been imposed. While for those consuming power from 101-300 units, the hike is 1.99% and for those consuming up to 300 units, it is 1.86%.
For consumers in non-residential (commercial and shops) section, the hike is 1.98%. Last year, residential consumers were given a tariff hike of up to 10.84%, commercial up to 9.12% and industry consumers up to 12.83%.
Interestingly, as the tariff for the agriculture sector witnessed a hike, which is not charged from the consumers as the government pays it to the PSPCL in the shape of subsidy, the subsidy bill for the state government has come down to Rs 4,454.54 crore for the current financial year, whereas it was Rs 4,778.13 crore in the last financial year.
Speaking on the reduction in the subsidy bill, PSERC member Virinder Singh said that in the previous orders the net power consumed in the agriculture sector was taken into account, which was found to be incorrect, but now while calculating the subsidy, the power pumped into the agriculture feeders was taken into account. Justifying the hike in the agriculture sector, Singh said, "The tariff policy and the PSERC regulation mandate that cross subsidy can't be plus/minus 20%."
Against last year's across-the-board increase of 9.06%, this year, the hike is only 2.74%. The tariff brought cheer to all consumer sections, but much to the displeasure of the PSPCL, against the projected revenue gap of Rs 2,595 crore in the annual revenue requirement petition (ARR) filed on November 29, 2013, the PSERC allowed only Rs 479 crore for the current year. Of cumulative gap of Rs 15,550.64 crore since 2011, the PSERC allowed only Rs 593 crore.
"The exaggerated and inflated figures by the PSPCL can't be allowed. The figures projected by the PSPCL could have led to an increase of 68% hike in the tariff which is simply not possible," PSERC chairperson Romila Dubey said. The PSERC, according to Dubey, has left it to the PSPCL to charge the arrears of five months from consumers in one go or in instalments.
Speaking on the delay in the tariff order announcement, she said the parliamentary polls, the assembly bypoll and the delay in clearance on free power to the agricultural sector led to the delay in the announcement.