Govt won’t pay PSEB for power
Umesh Dewan
Tribune News Service

Patiala, March 30
There is fresh trouble for the cash-strapped Punjab State Electricity Board (PSEB). The state government has asked the Board to adjust free power subsidy payment of Rs 1410.65 crore against the Rs 1140.43 crore loans the Board owes it. The already-in-the-red Board had pinned hopes on the free power subsidy payment for financial stability and officials are not happy. They said that government decision violates Section 65 of the Electricity Act, 2003. In fact, the Punjab State Electricity Regulatory Commission (PSERC) had clearly mentioned in its tariff order for 2007-08 that the subsidy amount could not be adjusted against any loan. Also, it must be paid in quarterly advance installments to the Board.

However, the letter - issued by the state Department of Finance to the Principal Secretary of the Department of Power - states that loans worth Rs 1660.5 crore were outstanding against the Board as on March 31. Loans running into Rs 1140.43 crore were due for repayment and the Board has been asked to pay off these loans at the earliest.

The letter, a copy of which is with The Tribune, mentions that the government had decided that the Rs 1140.43 crore loan be adjusted against the free power subsidy amount the state government has to pay the Board. No physical payment shall be made and the loan would be repaid by book adjustments.

“It is not the first time that this has happened. Earlier also the state government had adjusted Rs 1362 crore payable to PSEB in 2007-08 against an outstanding loan of Rs 3075 crore,” said PSEB Engineers’ Association president HS Bedi. Board chairman HS Brar was not available for comment.

PSERC petitioned to declare adjustment illegal
Jangveer Singh/TNS

Chandigarh, March 30
The Punjab State Electricity Regulatory Commission (PSERC) has been petitioned to declare the state government’s decision to adjust the Rs 1,140 crore loan against subsidy as illegal. Petitioner Gurnek Singh Brar, a former chief engineer, has in a petition filed here yesterday, urged PSERC to direct the government to withdraw the communication immediately. He has also demanded that the government be directed to pay the power board Rs 1,140 crore in cash.

The petitioner has demanded that in case the state does not make the payment in cash, then provisions of Section 65 of the Electricity Act should be invoked and the amount should be recovered from consumers. It has also been demanded that effective safeguards be incorporated in the tariff order for 2010-11 so that such adjustments do not happen again.

The Punjab government has adjusted subsidy due to the Board against loan last year also when it adjusted Rs 1,362 crore in this manner.

The petitioner said that it was the responsibility of the PSERC to monitor and administer the provisions of the tariff order released by it last year. It claimed that the instruction of the Commission in its tariff order that subsidy be paid in advance monthly installments was flouted in each and every month and that this non compliance resulted in accumulation of unpaid subsidy of Rs 1,400 crore, most of which has now been adjusted against loan.