Power tariff hiked by up to 12% in Punjab
The hike takes effect retrospectively, from April 1 for the financial year 2017-18, and the arrears calculated for the last six months will be adjusted in bills for the next nine months.punjab Updated: Oct 24, 2017 00:35 IST
The Punjab State Electricity Regulatory Commission (PSERC) on Monday announced a tariff hike across segments with an average increase of 9.3%. The hike takes effect retrospectively, from April 1 for the financial year 2017-18, and the arrears calculated for the last six months will be adjusted in bills for the next nine months.
With the regulator introducing multi-year tariff system, there is set to be an increase over the next two years too. “A negligible hike in future also,” is how PSERC chairwoman Kusumjit Sidhu put it.
Facing the maximum hike, domestic consumers who use more than 500 units a month now have to pay 12.2% higher tariff. The hike in absolute terms for them is 80 paise a unit, taking the tariff to Rs 7.36. For industrial and commercial consumers, the hike is up to 10%, though the government said it will keep its promise of Rs 5 a unit for industry from November 1.
Domestic consumers who use 101-300 units a month faced the minimum hike of 6.68%, taking tariff to Rs 6.55. Households consuming 301-500 units see a hike of 8.99% with tariff now at Rs 7.15. All bills will continue to have 18% tax, which includes 13% electricity duty spent on education and 5% infrastructure development charge.
Arrears of six months will be a cause of concern not just for the consumers but the state government too, which pays for the free power provided to the farming sector. For the 13 lakh farm tubewells covered under the free power regime, the PSERC has announced a hike of 10.5%, taking the subsidy bill to Rs 6,000 crore.
On 5-rupee promise
On the Rs 5 tariff promised to industry by the Congress regime that took office in March, the PSERC chairwoman said the subsidy for that — to be paid by the government to the Punjab State Power Corporation Limited (PSPCL) — is being worked out. Variable tariff for small, medium, general industry and arc furnaces has been put between Rs 5.48 and 5.74 a unit, besides a fixed charge of Rs 85 to 160 (per kVa). The hike thus ranges between 8.5% and 11.88%.
Chief minister Capt Amarinder Singh later in the day assured that his government will keep its promise, and subsidised tariff will be given for five years. In a statement, he explained, “The government will ensure that power is provided to small consumers at par with the existing tariff of Rs 4.99 per unit, a move that will benefit 85,000 small industrial consumers, while keeping the overall tariff to Rs 5 a unit in the new scenario of a two-part tariff, for industrial consumers in the medium and large category.” It must be mentioned that industrial consumers still will have to pay the fixed charges anyhow.
PSPCL had sought even more
The hike brings some respite for a cash-strapped PSPCL. Last year being poll year, there was actually a dip of 0.65% in tariff, and the year before that saw no hike too. From 2007 to 2017, in the SAD-BJP regime, there was 60% hike in tariff.
With Monday’s hike, the PSPCL hopes to mop up an additional Rs 2,522 crore, expecting total receipt of Rs 30,000 crore a year from 60 lakh consumers. In its annual revenue requirement (ARR) application, though, the PSPCL had sought Rs 28,910 crore as additional revenue. “I am sure they (PSPCL) will do well in the given hike,” said the PSERC chairwoman. The tariff pronouncement was ideally to have been made by March 31.
With the PSPCL giving “an approximate overall idea” for the next two fiscals too — Rs 30,241 crore for 2018-19, and Rs 31,739 crore for 2019-20 — these targets set in motion tariff hike for future too. The actual hike will depend on variable components such as fuel charges, sales, short-term power purchase, and any orders of a court imposing costs on the PSPCL.
Note of caution
It must be mentioned that the state government has a history of delaying subsidy on power. Last year’s free power to tubewells cost the PSPCl Rs 2,900 crore, but the government has still not paid it. There’s now an interest of Rs 491 crore on it. The total subsidy burden on the state government for the current financial year (including the dues) is Rs 10,970 crore. And this excludes subsidy for the Rs 5 a unit power to industry.