Punjab to oppose HP demand for more power project royalty

Aman Sood

Patiala, January 14

Punjab has decided to oppose any move of the HP Government for increasing royalty and handing over of the hydel projects in the state to itself after 40 years of their commissioning. Punjab Power Minister Harbhajan Singh ETO has sought a detailed report in this regard so that Punjab is ‘not burdened financially’ after this move by the hill state.

The HP Cabinet had in August 2023 amended the Himachal Pradesh Power Policy to ensure a greater royalty from projects. The state government has now sought 15 per cent royalty for the first 12 years, 20 per cent for next 18 years and 30 per cent for the last 10 years. As per the amended policy, the power projects will be handed over to the state government after 40 years of their commissioning.

“The moot question is whether the free power formula as approved by HP Government will also be applicable to Baggi power plant (42 MW) or even Dehar power house (6×160 MW) under the BBMB,” said a top PSPCL official.

The board had approved the Baggi power house in March 2020 with a provision of 13 per cent free electricity to the host state and another 1.5 per cent for local area development (LAD) under the National Hydro Power Policy. “Already Himachal is set to get free power and LAD share. Now, the provision to add more royalty and then handing the project to the state after 40 years will only spoil inter-state relations,” said a top PSPCL official privy to the matter.

“All BBMB projects and power sharing are decided under the framework of The Punjab Reorganization Act, 1966. This Act does not have any clause or any provision to give 13 per cent free power to the home state. Any Government of India notification on the subject of free power cannot overrule or override the Act,” opines the All India Power Engineers Federation spokesman VK Gupta.

“There is no free clause attached to the 6×160 (960 MW) Dehar power house, and both Dehar and Baggi power houses operate on the same water supply,” added Gupta.

“The BBMB has floated the tenders for completing the Baggi power house project. Most of the workis already complete,” stated a senior PSPCL official. “Any new royalty will be opposed and the matter will be taken up at every level,” he stated.