Punjab might raise power rates in May

The Punjab State Electricity Regulatory Commission (PSERC) might announce increase in electricity tariff by next month. According to sources, the state power utility, the Punjab State Power Corporation Limited(PSPCL) has proposed to the regulator to allow a raise of 10 per cent in the current financial year.

PSPCL has projected a revenue gap of Rs 2,595.30 crore for 2014-15 in an Aggregate Revenue Requirement (ARR) petition submitted with PSERC. To meet this gap, an increase in tariff was sought.

Sources in the commission said as a pre-election code of conduct has been enforced in the state, the state government could not commit to the subsidy it offers to the agricultural sector. Once the state government commits, the proposal of the PSPCL would be finalised.

On Friday, the power regulator issued orders that the existing tariff would continue for all categories of consumers till a new tariff is announced. The tariff order issued last year by PSERC for the year 2013-14 was to remain operative till March 31.

In its tariff order in 2013-14, PSERC announced an average overall increase of 9.06 percent in the existing tariff across all categories, including domestic, agricultural pumpsets consumers, industrial, commercial, etc. The consolidated revenue gap determined by the commission for FY 2013-14 was Rs 1,782.50 crore. To meet this, an increase of 9.06 per cent is required across the board, so it was raised.

However, industrialists already opposed the PSPCL move to hike the power tariff in the state in its annual revenue requirement (ARR) submitted to the PSERC for the financial year 2014-15, stating it would be demoralising for the industry.

"It is not in favour of the industry. Many of the power intensive units have already started closing down due to higher power tariff and any such proposal to hike the tariff should be withdrawn and no hike be demanded from the consumers." said industrialists. They suggested that that cross subsidy on power should be reduced and relief be given to the industry in the proposed tariff order.