Punjab State Power Corporation Limited (PSPCL) has slipped from A+ grade to A in the annual ranking report for the financial year 2020 released by the Union ministry of power recently.
High cost of power purchase and non-payment of subsidy are the main reasons for the lower rating. Union minister of power RK Singh released the 9th annual report in the online meeting of Power Finance Corporation, comprising assessment of 41 electricity distribution companies (discoms), of the country. Gujarat discoms retained its top performance in the integrated ratings.
In 2018-19 fiscal, the PSPCL got A+ rating due to the sale of surplus power of ₹1,183 crore to other states, earning a profit of ₹453 crore. The report then highlighted low transmission and distribution losses, timely tariff orders and audited reports as key strengths of the PSPCL.
However, it raised concern over absolute subsidy dependence, high cost of power purchase and high employee costs.
“Though the PSPCL has slipped in the rating, it is among the top 10 entities. The higher cost of power purchase is a concern and it’s because of fixed cost. In 2019-20 fiscal, for which the report has been issued, the PSPCL paid ₹1,510 crore as fixed charges to independent power plants without getting power. This is almost 43% of ₹3,521 crore fixed cost paid to independent power plants. When the PSPCL is paying almost 43% without getting power, the cost is set to rise,” said VK Gupta, spokesman of the All India Power Engineers Federation. He said that the PSPCL should work out a plan to avoid fixed cost.
{{/usCountry}}“Though the PSPCL has slipped in the rating, it is among the top 10 entities. The higher cost of power purchase is a concern and it’s because of fixed cost. In 2019-20 fiscal, for which the report has been issued, the PSPCL paid ₹1,510 crore as fixed charges to independent power plants without getting power. This is almost 43% of ₹3,521 crore fixed cost paid to independent power plants. When the PSPCL is paying almost 43% without getting power, the cost is set to rise,” said VK Gupta, spokesman of the All India Power Engineers Federation. He said that the PSPCL should work out a plan to avoid fixed cost.
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