Punjab power rates up by 11 paise/unit for domestic users, 15p/unit for industry
The hike will not affect most domestic users as Punjab govt provides 300 units of free power to each consumer, and neither will it have a bearing on the agri sector that also gets free power.
The Punjab State Electricity Regulatory Commission (PSERC) on Friday decided to increase the power tariff by 11 paise per unit for domestic consumers and 15 paise per unit for industrial users from June 16, 2024, to March 31, 2025.
The hike will not affect most domestic consumers as the Punjab government provides 300 units of free power to each consumer and neither will it have a bearing on the agricultural sector that also gets free power.
But the move will burden the government as it pays subsidy for both agriculture and domestic consumers that comes to ₹21,909 crore a year.
Domestic consumers using over 300 units per month will have to bear the burden on account of increase in the power tariff.
The tentative amount of tariff hike in case of domestic category is around ₹133 crore, out of which ₹120 crore will be borne by Punjab government. Out of the total tariff hike of ₹654 crore allowed by the PSERC, about ₹636 crore will be subsidised by the Punjab government and only ₹18 crore will be borne by consumers.
Punjab’s subsidy bill now
11% of annual budget
Earlier, the Punjab State Power Corporation Limited (PSPCL) had submitted an aggregate revenue requirement petition to the PSERC, seeking an ARR of ₹53,360.48 crore due to a revenue deficit of ₹5,419.82 crore up to the 2024-25 financial year.
In the 2022-23 fiscal, there was a deficit of ₹6,977.98 crore and surplus of ₹1,558.16 crore during FY 2024-25.
However, the PSERC determined a revenue gap of ₹654.35 crore after a thorough check and allowed for previous period dues of ₹4,072.27 crore. Thus, the commission determined an additional revenue requirement of ₹654.35 crore instead of the ₹5,419.82 crore sought by the PSPCL.
The average cost of supply for FY 2024-25 works out to be 715.55 paise/kWh, which is 1.59% higher than the ACoS of 704.34 paise/kWh as determined in the tariff order for FY 2023-24, resulting in an increase of about 11 paise/unit over the average cost of supply of FY 2023-24.
Accordingly, the ARR determined for FY 2024-25 will be ₹44,239.14 crore and the projected net revenue to PSPCL from the announced tariff during FY 2024-25 will be ₹48,467.72 crore, thus clearing the previous deficit determined and allowed by the commission.
However, the bigger worry for the PSPCL and state government is that the power subsidy bill has come to whopping Rs. 21,909 crores. This is almost 11 percent of total budget of Punjab. This subsidy has also made the PSPCL fully dependent upon government as almost 45 percent of its revenue will come from government in lieu of subsidy.
