The Punjab State Power Corporation Ltd (PSPCL) is contemplating the introduction of a two-part tariff in electricity for retail supply consumers except agricultural pumpset consumers, temporary supply consumers and public lighting. The proposed move would not only help the state power utility to raise additional revenue, which has already invested significant amount in transmission network, but also strengthen its existing network.
The state has, at present, a single part tariff policy. In a two-part tariff policy, the consumer would have to pay fixed charges, based on the sanctioned load or contract demand of the consumer besides variable charges, based on the actual consumption of power.
Taking a step forward in this direction, the PSPCL had submitted its proposal to the Punjab State Regulatory Commission (PSERC), the state’s electricity regulatory body for its approval. However, the PSERC directed it to examine the issues raised by the consumers and consumer organisations and asked it to submit detailed revised proposal within 3 months for introduction of two part tariff after addressing the concerns of the various opposing voices.
The commission is of the view that a two-part tariff should be introduced only after building a consensus amongst various stakeholders of the utility through public hearings and by critically analysing the actual billing data to determine the impact on consumers as well as revenue of utility.
Once it is implemented, the monthly minimum charges levied on bills would be discontinued. Further, there is a common perception, that once implemented, the rates per unit will be higher, but according to PSPCL officials, whatever be the utilisation factor, the average per unit rate would remain close to the existing rate and hence consumers will not be at a disadvantage.
Sources in the state regulatory commission informed that in view of the complicating or divergent views expressed by various stake holders, the commission does not consider it appropriate to introduce a two part tariff during the year 2012-13, but would like to surely prepare the ground for implementation from the next financial year.
Earlier, in order to meet the revenue gap of Rs 1,899.32 of the PSPCL for the year 2012-13, PSERC increased the electricity tariff by 12.08 per cent (on an average) in the existing tariff across all categories including domestic, agricultural pumpsets consumers, industrial, commercial against the 55 per cent proposed by the state Power corporation. Further, the commission has also approved a capital investment plan of Rs 2,800 crore for the PSPCL so that infrastructure is strengthened which would improve quality of service to the consumers of the state. Experts mentioned that the proposed two-parttariff policy will also help the corporation in terms of revenue generation.
Industry miffed at tariif hike
The 12 per cent hike in power tariff across sectors by the Punjab State Electricity Regulatory Commission (PSERC) has come as a big shock to the Punjab industry and industrialists feel it will make them uncompetitive in the domestic as well as the global market. They mentioned the Industry is already passing through a rough phase because of the economic slowdown, high raw material cost as well as high production and a further hike in power tariff will make the finished cost costlier by at least 5 per cent.
Speaking to Business Standard, Punjab Chamber of Small Exporters, Vice President, Ashwani Kohli said, “We are passing through very bad phase and the hike in electricity tariff will further deteriorate our condition. The industry would have appreciated, if the government would have reduced the transmission and distribution losses, took effective steps for power theft instead of hiking the power tariff. Besides taking these concrete steps the government should also focus on reducing the overhead expenses.” The textile, steel and other manufacturers mentioned the hike in power tariff will certainly put the local industry into a disadvantageous position as compared to other states like Madhya Pradesh, Gujarat where the electricity rates is cheaper than Punjab. “
The maximum adverse impact of increase in power rates is going to be visible on iron and steel producing units like furnace and rolling mills and textile, spinning units,” said one of the industrialist.
