PSPCL projects revenue gap of Rs 11,317.78 cr up to 2015-16

State-owned power utility PSPCL has projected total revenue gap of Rs 11,317.78 crore up to financial year 2015-16, seeking "appropriate increase" in the power tariff from power regulator to cover the proposed gap.
The power subsidy on account of free power to farmers and SC and non-SC BPL domestic consumers has been projected at Rs 6,130 crore for 2015-16, up by 5 per cent from subsidy of 2014-15 financial year.
In an Aggregate Revenue Requirement (ARR) petition submitted with the power regulator Punjab State Electricity Regulatory Commission (PSERC) for the fiscal 2015-16, Punjab State Power Corporation Limited (PSPCL) has projected net revenue requirement and revenue generation as Rs 27,683.96 crore and Rs 24,414.81 crore respectively, leading to an annual revenue gap of Rs 3,269.26 crore.

With the addition of previous years' revenue gap and carrying cost on the same, the total revenue gap has been projected to be Rs 11,317.78 crore up to the financial year 2015-16.
Notably, power regulator PSERC had brought down the PSPCL's projected consolidated revenue gap of Rs 15,550.64 crore to mere Rs 593.63 crore up to the financial year 2014-15 while announcing tariff increase this year.
With the "lowering" of revenue gap, there was a "minimal" hike in the power tariff at 2.74 per cent for the financial year 2014-15.

In the petition, PSPCL appealed to PSERC to approve the proposed revenue gap at the existing tariff for 2014-15 and 2015-16 and approve appropriate tariff increase or change so as to cover the proposed gap.

In the ARR, PSPCL has projected a hike of 22 per cent and 24 per cent in fuel cost and employee cost for 2015-16 the financial year. Cost of fuel has been estimated at Rs 5,360.10 crore while employee cost has been proposed at Rs 5,480.61 crore.
The power purchase cost, which accounts for major share in the ARR, has been projected at Rs 11,488.12 crore, up by 11 per cent from the cost estimated in 2014-15 financial year, as per petition.
In case of fuel subsidy, PSPCL has projected it at Rs 6,130 crore comprising free power to farmers worth Rs 5,195.52 crore and free power to SC and Non-SC BPL consumers at Rs 934.17 crore for 2015-16 fiscal.

Notably, Punjab government bears the entire financial burden on account of free power supply to farmers, a major vote bank for SAD party. In addition to it, free power supply up to 200 units per month with connected load of 1000 watt is also given non-SC BPL and SC families in the state.
After receiving the petition, PSERC will invite objections from all stakeholders including industry and other consumers before announcing new power tariff hike.