Consume more power and pay less. That’s the mantra set to be at the core of Punjab State Electricity Regulatory Commission (PSERC)’s 2017-18 industry-friendly power-tariff regime that will be announced after the formation of the new state government.
The PSERC on Saturday indicated that to achieve twin objectives of overcoming Punjab’s power surplus problem and to accelerate industrial expansion, the consumers using more power should be rewarded by charging less.
“Those who consume more should pay less. The consumer is the king. I favour this policy as it will nudge industrialists to expand their operations, which in turn will lead to more employment and consumption of more power,” DS Bains, PSERC chairperson, said in a news conference.
He said as the “state is power surplus” and to boost power consumption, the tariff should be inversely proportionate to the consumption.
In another first, the power regulator will also determine two years indicative tariff for 2018-19 and 2019-20 while announcing electricity consumption charges of 2017-18 in March-April and after the new government is formed.
A former Punjab-cadre IAS officer, Bains said the objective behind determining two years indicative tariff in advance is to help the industry plan its future expansions.
“I am in favour of announcing tariff for one year and indicative tariff for next two years in advance,” Bains, who was appointed the PSERC chairman post retirement by deputy chief minister Sukhbir Singh Badal.
Also, the PSERC will start issuing two-part tariff in each bill for the industry from the next fiscal. The two-part tariff will have fixed amount as per the allotted power load and the second part of the bill will pertain to the power consumption charges.
Reducing cross subsidy
While the industry, including 8,000 spinning mills, consumes around 30% power, another third is consumed by the agriculture sector free of cost while the remaining third goes to domestic power consumers. Last year, the power subsidy bill of the farm sector was ₹6,463 crore, which is going to rise with Punjab having about 13.5 lakh tubewell connections meant for irrigation. Punjab has 72 lakh power consumers in different categories.
Responding to a question, Bains said free power to farmers was the prerogative of the government, as per the Indian Electricity Act, which the regulator “has to honour”.
He, however, said people were against the “cross subsidy” and wanted to curtail this practice. “During public hearings, consumers of various categories stated that cross subsidy should be reduced to give a fillip to industries requiring large power supply, which will help in employment generation. We have already reduced the cross subsidy levels,” he said.
Cross subsidy is the practice of charging higher prices to one group of consumers to subsidise lower prices for another group.
The Punjab State Power Corporation Limited (PSPCL) has filled tariff petition for multi- year tariff too. “The commission will determine annual revenue requirement of the PSPCL and Punjab State Transmission Corporation Limited (PSTCL) for three years,” said Bains.