Rise in coal prices may lead to hike in power tariff

Ruchika M Khanna

Chandigarh, March 14

Keeping power tariff for different categories of consumers unchanged for 2023-24 will be a big challenge for the Aam Aadmi Party government, as it prepares to receive the tariff order for the next fiscal from the Punjab State Electricity Regulatory Commission (PSERC).

The new tariff order would be announced in the last week of March and would become effective from April 1.

With the state government’s power subsidy bill increasing by nearly Rs 4,350 crore within a year because of free power to domestic consumers, an abnormally higher power demand expected in the peak summer and increased prices of coal and freight, a category of consumers may end up paying a slightly high power tariff.

Last year, an amount of Rs 15,845.63 crore was set aside for the power subsidy. For this fiscal, subsidy has been revised to Rs 20,200 crore – an increase of Rs 4,354.37 crore.

The state government has already set aside an amount of Rs 20,243.76 crore as power subsidy in the Budget for the next fiscal and the government’s assurance on meeting this subsidy demand would be submitted to the PSERC this week.

It may be mentioned that power subsidy paid in Punjab is amongst the highest in the country. Till February, the state government has already paid subsidy of Rs 18252.18 crore to PSPCL and only Rs 1,060 crore is pending.

Officials of the Electricity Department said the burden of hike in power generation and subsidy had to be transferred to the consumers.

Earlier, PSPCL in its annual revenue requirement (ARR) submitted to the PSERC had asked for a hike in tariff to meet its revenue requirement of Rs 42,753 crore for the next fiscal, citing an increase in its requirement by Rs 4,149 crore. If this gets approved by the PSERC, the power tariff may likely go up by Rs 0.30- Rs 0.60 per unit.

Sources said though the state government had paid power subsidy to PSPCL on a regular basis this fiscal, it was yet to clear the “legacy” subsidy of Rs 9,020 crore, which had not been paid by the previous governments. As per a liquidation plan, the government has agreed to repay legacy amount in five annual instalments.