PSEB Engineers’ Association condemn the distortion of facts and figures by Member / Finance of the Board while projecting the deteriorating financial health of the board to the State Govt. as reported in a section of the press.

It has been indicated by Member F&A that excessive power purchase during first 4 months of 2007-08 is responsible for the financial crisis of the Board. Board has to restore to power purchase as no generating capacity has been added in Punjab during the last 6 years while the demand increased by 8 to 10% annually.
The fact that power regulator is allowing 100% cost of power purchase as per “National Tariff Policy” has probably been deliberately overlooked. During the year 2005-06, PSEB incurred an actual expenditure of Rs 2404 Cr on power purchase against Rs 2260 Cr approved in tariff order. During review of actual expenses at the end of the year, PSERC allowed full expenditure of Rs 2404 Cr on power purchase to PSEB. Similarly PSERC allowed actual expenditure of Rs 2281 Cr during 2004-05, Rs 1413 Cr during 03-04 and Rs 1466 Cr during 2002-03 on power purchase to PSEB.
It is not the power purchased but total financial mismanagement of the Board which is responsible for the current financial mess. The situation has arisen due to the no tariff hike during 2006-07 and decision of the board not to file its annual tariff petition for 2007-08 before deadline of Nov. 2006 fixed by Power Regulator (PSERC) in order to please the political masters in the previous government in view of the assembly elections. Member / Finance should have raised hue and cry at that time since non-filing of the tariff petition in time has resulted in a huge loss of additional revenue in the first 5 months of 2007-08 forcing the Board to raise short term loans. At the same time, Board failed to collect over Rs 716.63 Crore payable by GOP to PSEB as pointed by PSERC. This include Rs 421.99 CR as subsidy which should have been collected in advance as per the provisions of Electricity Act 2003.
It has further been projected that PSEB is purchasing some power at a rate as high as Rs 6.76 per unit against PSEB earning of Rs 3 per unit by supplying the same power to consumers. This is again misrepresentation of facts as it is the average cost of supply which determines the average tariff to be charged from consumers and not tariff of each unit of power purchased. The average cost of power purchased during 2006-07 was Rs 2.99 per unit & during the first 5 months of this year, it was Rs 3.00 per unit. This power was not only fed to subsidized category of consumers but a substantial part was provided to Commercial & industrial consumers who are paying more than Rs 4.28 per unit to PSEB.
The suggestion of Member/Finance to impose power cuts in the state to reduce power purchase cost and tackle financial crisis is totally retrogressive. It is not expected from the Board to impose power cuts to harass the public and stall the economic growth of the state particularly in a situation when power is available in the grid and cost of power purchased is being allowed to be passed on to the consumers by the regulator. The state after a long period has witnessed a “No Power Cut’ summer mainly due to the un-tiring efforts of the engineers to arrange power in an acute power shortage scenario prevailing in the country. Almost all the northern states were after this power and it was only due timely tie up of this power by Punjab that other states have to restore to heavy power cuts leading to agitations by the public and slow down of industrial production. On the other hand due to supply of adequate power to all sections of the Consumers, PSEB has earned not only 10% additional revenue without any increases in tariff but has also contributed to increased agricultural and industrial production in the state.
The other suggestion of the Member/ Finance to stop release of funds for transmission and Distribution improvement works tantamount to scuttling many new initiatives under taken by the Board to reduce technical losses & to improve customer service. State government has fixed an ambitious target to add 5000 MW of generation in next 5 years. Without matching augmentation in transmission and distribution network, the public shall be deprived of the benefits of this additional generation bringing a bad name to the state government. Moreover, Power Regulator has been imposing severe financial cuts on account of non-achievement of T&D loss reduction targets. Although the target fixed by the regulator is unrealistic but it is imperative to convert obsolete theft prone low voltage system to high voltage system to further reduce PSEB’s 23.7% T&D loss which is one of the lowest in the country for which huge investment is required. PSEB’s initiatives for loss reduction are being adopted by other states but some vested interests are creating hurdles in its implementation in Punjab.
Association caution the state government that suggestions by a section of bureaucracy for imposing power cuts in the state and stopping development works in PSEB under the grab of financial crisis is just a ploy to paralyse the Board to achieve the goal of unbundling PSEB by branding it as inefficient and loss making organization.

(Er. R.S.Sarao) (Er.H.S.Bedi)
General Secretary President