It’s a shocker for the electricity consumers hoping to escape tariff rise this financial year in view of the upcoming elections.
To join the Centre’s Ujwal DISCOM Assurance Yojana (UDAY scheme) for the financial health of Punjab State Power Corporation Limited (PSPCL), Punjab in the tripartite agreement has committed for a tariff increase of 5% and 9% in the financial years 2016-17 and 2017-18, respectively, besides hike for another year.
Electricity charges didn’t increase in the year 2015-16 and climbed by only 2.74% during 2014-15. Consumers, thus, least expected a rise when state elections are due in less than a year. Though a power regulator decides tariff, the government still has a say in it, but Punjab has its commitments under UDAY.
The regulator has asked the PSPCL to send it the agreement and revise the annual revenue requirement (ARR) based on it. In the year 2015-16, the interest burden on the PSPCL is about Rs 2,800 crore, or 65 paise per unit tariff. The Centre has introduced UDAY to reduce power tariff component on account of the interest burden.
Under UDAY, of the total PSPCL debt of Rs 20,837 crore as on September 30, 2015, the Punjab government will take over Rs 10,419 crore (50%) by March 31 and Rs 5,209 crore (25%) by this September 30. It has kept this provision in the latest budget. Overall, UDAY will lower PSPCL’s annual debt interest burden by Rs 600 crore.
The Punjab government is bound to clear the Rs 300-crore pending electricity bills of its departments by the end of this year; but so far, it has not issued any direction in this regard to Punjab Police, education and local bodies department, and other major defaulters. The budget provisions say the PSPCL will distribute 120-lakh LED bulbs (two per consumer) in the three years starting this September and replace at least 1.2 lakh (10% of) agricultural pump sets by March 2019.
Asked about it, power secretary A Venu Parsad said the government had budgetary provision to take over the PSPCL loan under the tripartite agreement that would decide the remaining modalities and was required to strengthen the corporation.
5% and 9% in the financial year 2016-17 and 2017-18, respectively, besides hike for another year