Power rates kept unchanged in Punjab; slashed for industries

Power consumers in poll-bound Punjab were today spared from hike in tariff by the power regulator which also slashed the energy rates for industrial users to promote growth.
The Punjab State Electricity Regulatory Commission (PSERC) did not raise the power tariff for Punjab State Power Corporation Limited (PSPCL). This is the second consecutive year that power tariffs were not raised in the state.
The regulator has also decided to abolish Peak Load Hours Restrictions (PLEC), surcharge and offered rebate for existing large industrial consumers for consuming power beyond threshold limit, a move which is aimed to boost production and generate employment.

Deputy Chief Minister Sukhbir Singh Badal said the step has been possible due to reforms taken by the government in the power sector and rejected suggestions that the move came in view of the upcoming assembly polls in the state.
"Punjab has the best power environment in the country now for setting up industry. Punjab has surplus power now," he said, adding that no grid feeder was overloaded in the state.
He said that the old thermal plants in the state are being replaced by new technology plants.

Sukhbir said that the Transmission and Distribution (T and D) losses had been brought down from existing 24 to 14 per cent in the state.

For new industrial investments which were proposed during the Progressive Punjab Summit, the special tariff of 499 paise per unit will be charged as promised by the Punjab government earlier and difference in tariff will be borne by the state government.
The announcement has come as a relief for the people of Punjab which is going to assembly elections next year.
Last year, after a gap of eight years, no power tariff hike was announced.
Announcing the new power tariff for the financial year 2016-17 here, PSERC Chairman D S Bains said, "We have decided to pass on the benefit of revenue surplus of Rs 166 crore to the industry. We have decided to reduce rates for various industrial categories".

Under industrial category, the power rates for Small Power (SP), Medium Supply (MS) and Large Supply (LS) have been slashed by 38 paise a unit, 36 paise a unit and 11 paise a unit respectively. After this reduction, the revised power rates for SP, MS and LS will be 547 paise per unit, 599 paise per unit and 635 paise per unit respectively.
When asked why relief could not be given from April, Bains
said, "Calculation of refunds is a complicated matter. However, whatever benefit (of reduction in tariff) will be, it will given in eight months as we have annualized it".

The relief to industry in tariff was given after it was found that the state's industrial growth had "slipped" below the national average after 2012.
Bains said PSERC had sought help of consultant IIM Ahmedabad to advise how the state should deal with power surplus scenario.
"It said in the report that there was a significant opportunity to promote industrials sector in Punjab. They said Punjab's industrial growth from 2005 was above national average but after 2012, industrial growth slipped below national average. It recommended industrial sector needed to be promoted in the state," Bains said.
PSERC has worked out consolidated revenue surplus for the financial year 2016-17 in respect of PSPCL at Rs 165.94 crore.

The tariff for other categories including domestic, railways, bulk supply, non-residential supply and agriculture pumpsets (AP) will remain unchanged. "There will be no change in tariff for other categories," said Bains.
At present, domestic consumers are charged tariff between 452 paise a unit and 604 paise a unit while for AP category, the tariff stands at 458 paise a unit.
Punjab has about 85 lakh power consumers comprising 61 lakh domestic category, 13 lakh AP category.
Among other measures, PSERC has decided to do away with PLEC regime from August. "A surcharge of Rs two per unit as against current Rs 3 per unit will be imposed on large supply industrial consumers for consuming power from 6 pm to 10 pm only for August and September months. From October, there will be no PLEC or surcharge and there will be a rebate of Rs 1 per unit during night hours from 10 pm to 6 am," he said.

Commission Chairman further said PSERC has approved lower base tariff of 499 paise per unit for large supply category consumers who consume beyond a threshold limit which is more than maximum annual consumption during last two financial years to encourage more power consumption.
"It will create more employment opportunities in Punjab, increase tax collection for government and more revenue for power utility," Bains said.
Meanwhile, Sukhbir said, "This relief will put an additional burden to the tune of Rs 2,500 crore annually on the state exchequer".
He said that three major industrial units are coming up in Punjab. "A food park is being set up in Ludhiana, e-cycle valley is also coming up in Ludhiana," Sukhbir said, adding that an industrial park is also coming up at Rajpura.

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PSERC has also approved system of annual minimum charges instead of monthly minimum charges for marriage palaces.
"We have noticed that marriage palaces are being run on generators which cause pollution and also costs Rs 14 a unit. With this approval, expensive power supplied by gensets will no longer be used by marriage palaces and it is also an environment-friendly measure," Bains said.
The commission has also approved capital investment plan of Rs 1,600 crore for PSPCL and Rs 500 crore for Punjab State Transmission Corporation Limited to strengthen infrastructure. An investment plan of Rs 16.30 crore has also been approved for SLDC business of PSTCL.

As part of energy conservation measures, PSERC has also decided to launch a pilot project in which about 100 existing agriculture pumpsets will be replaced by 5 star pumpsets.
"If it goes well, then one lakh more pumpsets shall be replaced and it will reduce power consumption. Moreover, in principle approval has been made for replacement of 16 lakh incandescent lamps with LEDs as pilot project. For these, provision for a sum of Rs 10 crore has been made," said Bains.
To a query on free power to Gaushalas (cow shelters), Bains said the commission has not received petition in this regard. "As and when we get petition, we will consider it sympathetically".

Regulator has determined annual revenue requirement of PSPCL at Rs 26,974.98 crore against the projected ARR by PSPCL at Rs 32,089.19 crore.
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This is for the second consecutive time in over nine- year-old SAD-BJP coalition government in Punjab that power rates were not hiked. Last fiscal also, power tariff was not raised in the state by the PSERC.
As per the information provided by the PSERC, there was no hike in power tariff in 2006-07 when Captain Amarinder Singh was the chief minister.
During SAD-BJP regime, which took reins of the state from 2007-08 onwards, the lowest average increase in power tariff was 2.60 per cent in 2008-09, followed by 2.74 per cent in 2014-15 and 4.90 per cent in 2007-08.
However, the highest raise in power tariff during Akalis regime was witnessed in 2009-10 when energy rates were revised upwards by whopping 12.42 per cent, followed by 12.08 per cent in 2012-13.
In 2005-06, when Congress was in power, the power tariff was hiked by 10.27 per cent.
Notably, SAD-BJP regime has been facing severe criticism from several quarters including industry and other stakeholders for selling power at "higher" rates than that of other states.