Power tariff order on Monday
Hike likely in domestic, commercial categories
Jangveer Singh
Tribune News Service

Chandigarh, September 4
The Punjab State Electricity Regulatory Commission (PSERC) is set to announce new tariff order for 2009-10 on September 7 with the state government submitting a written commitment that it would cover the entire subsidy payable to the Punjab State Electricity Board (PSEB) on account of free power being given to the farming sector.

The commission has received a commitment from the Chief Secretary that the state will pay Rs 3,100 crore to the PSEB as subsidy for providing power for tubewell operations. Commission secretary Namita Sekhon confirmed this.

Earlier, the government had kept a budgetary provision of Rs 2,600 crore for paying the subsidy but had recently been asked by the commission whether it would pay the enhanced subsidy to the agricultural sector.

According to sources, the commission has been left with no choice but to hike the tariff for both domestic and commercial power consumers with the PSEB projecting an unprecedented revenue gap of Rs 4,436 crore. This revenue gap is more than double the earlier gaps of Rs 1,802 crore (2007-08) and Rs 1,366 crore (2008-09).

The annual revenue requirement (ARR) application of the PSEB is silent on the issue of tariff revision. However, a perusal of the application leaves one in no doubt that the electricity board is in the midst of a debt trap. The board has projected an annual revenue requirement of Rs 16,783 crore out of which Rs 7,265 crore has been earmarked for purchasing power. Besides, it has listed that it is paying as much as Rs 1,506 crore as interest on loans taken by it. Since the board has to not only make good the requirement of this year but also cover earlier losses, a tariff hike may be the only solution though sources said efforts might also be made by the commission to cut down on expenses.

Consumers may be adversely affected because the commission will be imposing the new tariff order with retrospective effect from April 1 this year. Consumers will have to pay for the hike in instalments besides paying more from next months onwards. As far as domestic power is concerned, consumers are already paying Rs 4.10 per unit for consumption between 100 and 300 units and Rs 4.32 per unit for consumption beyond 300 units.

Meanwhile, the state government is still to clarify whether it will pay cash-strapped PSEB subsidy in advance quarterly instalments as directed earlier by the commission. Former PSEB chief engineer Padamjit Singh, who has demanded this in a petition filed with the commission, has claimed that all Electricity Regulatory Commissions were bound by the national electricity policy. He said para 2.0 of the policy calls for working for a financial turnaround and commercial viability of the power sector and that PSERC should keep this in mind while issuing its tariff order.