The Punjab State Electricity Regulatory Commission (PSERC) on Friday decided to increase the power tariff by 11 paise per unit for domestic consumers and 15 paise per unit for the industrial sector from June 16, 2024, to March 31, 2025.
The hike will not affect most domestic consumers as the Punjab Government already provides 300 units of free power to each consumer and neither will it have a bearing on the agricultural sector that also gets free power. But the move will burden the government as it pays subsidy for both agriculture and domestic consumers that amounts to ₹20,000 crore a year.
Earlier, the Punjab State Power Corporation Limited (PSPCL) had submitted an aggregate revenue requirement petition to the PSERC, seeking an ARR of ₹53,360.48 crore due to a revenue deficit of ₹5,419.82 crore up to the 2024-25 financial year and. In the 2022-23 fiscal, there was a deficit of ₹6,977.98 crore and surplus of ₹1,558.16 crore during FY 2024-25.
However, the PSERC determined a revenue gap of Rs. 654.35 crore after a thorough check and allowed for previous period dues of ₹4,072.27 crore. Thus, the commission determined an additional revenue requirement of ₹654.35 crore instead of the ₹5419.82 crore sought by the PSPCL.
The average cost of supply for FY 2024-25 works out to be 715.55 paise/kWh, which is 1.59% higher than the ACoS of 704.34 paise/kWh as determined in the tariff order for FY 2023-24, resulting in an increase of about 11 paise/unit over the average cost of supply of FY 2023-24.
Accordingly, the ARR determined for FY 2024-25 will be ₹44,239.14 crore and the projected net revenue to PSPCL from the announced tariff during FY 2024-25 will be ₹48,467.72 crore, thus clearing the previous deficit determined and allowed by the commission.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
