Even as the average power cost for Punjab consumers decreased by 18 countries per unit in 2020-21, the state subsidy bill for the current fiscal year increased to 53% of the annual revenue requirement (ARR) of Punjab State Power Corporation Limited (PSPCL). This means that the state government’s allocation of power subsidies alone would account for more than half of the budgetary needs of the PSPCL. The Punjab State Electricity Regulatory Commission (PSERC) approved the Subsidy Bill of around Rs 16,400 crore in its latest tariff order issued on Monday. The Commission decided that the AAR of the Power Corporation was approximately Rs 31,100 crore, against the demand of approximately Rs 41,721 crore. The 2010-21 grant bill is for Rs 10,621 crore, which adds up to Rs 16,400 crore to the previous year’s payments. The State Government must pay this amount by March 2021.
The increase in the State Subsidy Bill is mainly due to a rise in the cost of electricity being supplied to about 14 Lakh state agricultural connections, which consume 12,334 million units per year. The PSERC increased the cost of power by 9 countries per unit or Rs 22 per BHP per month for agricultural connections. In addition, it has also imposed a surcharge of Rs 370 crore on AP consumption for non-payment of fees by the state government.
Last year, the State Subsidy Bill amounted to Rs 9.674 crore with Rs 5.297 crore. The total grant bill for 2019-20 was Rs 14,972 crore, now swelled by another Rs 1,428 crore.In its order of 18 March this year, the Commission requested PSPCL to continue the current tariff until the tariff order for FY 2020-21 had been released. As a result, the State Government is now liable to pay the PSPCL an sum of Rs 1,268 crore per month for April and May, while the remaining amount of Rs 13,863 crore is expected to be paid in advance in 10 monthly instalments. It is estimated at Rs 1,386 crore from June 2020 to February 2021 and Rs 1,386 crore from March 2021.
While calculating cross-subsidies, PSERC noted that the state government would provide free power worth Rs 6,810 crore for agricultural connections, Rs 1,600 crore for LS supply consumers, Rs 1,263 for scheduled caste (SC) domestic supply, backward class consumers would receive free power worth Rs 173 crore, medium supply consumers would receive subsidies for Rs 165 crore and small pow. The non-SC below the poverty line consumers will receive Rs 75 crore and the freedom fighter will receive Rs 0.83 crore as a power subsidy this year.
