E-Paper
Power shocker: PSPCL seeks 14% hike in tariff next fiscal
Urges PSERC to reduce tariff of domestic consumers for first 100 units per month by 15%
Brace for another shocker as Punjab State Power Corporation Limited (PSPCL) has sought 14% power tariff for 2020-21 to mitigate its revenue deficit.
The Punjab State Electricity Regulatory Commission (PSERC) last week allowed surcharge of ₹1,790 crore on power consumers as coal washing charges, making power costlier by 35 paise per unit in the state. Now, the PSPCL has filed an annual revenue requirement (ARR) petition before the power regulator to further jack up the tariff to generate an additional ₹4,545 crore to meet rising needs of revenue for next financial year.
The power regulator has approved the PSPCL’s ARR for public hearing and will decide on the tariff hike in April after listing to objections from stakeholders.
The PSPCL has projected a revenue of ₹37,250 crore in the ARR for 2020-21 as against ₹32,704 crore with the existing tariff. If implemented, the hike in power tariff will put an addition burden of ₹4,545 crore on consumers.
“The recovery of the revenue gap of ₹11,179 crore in a single year will increase the existing tariff substantially. This would lead to tariff shock to consumers. The PSPCL doesn’t intend to burden on consumers, hence it is proposed to recover the part of revenue gap in the next fiscal. The remaining amount of revenue gap will be recovered in the next two years,” reads the ARR petition.
The average cost of supply for current financial year is ₹6.62 per unit and the PSPCL has project to hike this to ₹7.26 per unit for next fiscal.
However, following the Delhi model, the PSPCL has proposed cross-subsidy for domestic consumers. It has proposed that the energy charges for domestic category to be reduced. The energy charges for first 100 units consumed have been proposed at ₹ 4.25 per unit from ₹4.99, almost 15% reduction from the existing tariff.
The power corporation PSPCL has also asked the power regulator not to cross-subsidise the agricultural power supply from other consumers. “Why the other consumers pay subsidy for power consumed by the agriculture sector?” said a PSPCL official. At present, the PSPCL gets ₹5.28 per unit for power to agriculture sector, but it has proposed to withdraw all cross-subsidy and to use this amount to subsidise domestic consumers.
Further, the PSPCL has asked the regulator to allow power subsidy as per consumption. It has submitted that 75% of consumption in the agriculture sector takes place in first half of the year (between April and September), thus the PSPCL should get 75% of subsidy for free power to agriculture sector in first six months. Presently, the PSERC allows power subsidy in 12 equal monthly instalments, which the state government never pays on time.
In the ARR, the PSPCL has projected ₹2,133 crore as fuel cost, ₹21,914 crore as cost of power purchase, ₹5,240 crore as employee cost (salaries), and ₹2,200 crore as interests on loan and working capital, while it has to pay ₹1,329 crore for transmission of power to Punjab State power Transmission Limited.
