Punjab electricity board engineers flag PSPCL’s ‘unrealistic’ power loss target

PSPCL originally filed its MYT petition on November 28, 2025, proposing a gradual reduction in distribution losses from 12.75 per cent in FY 2026–27 to 12.20 per cent by FY 2028–29, based on what it described as realistic field conditions and operational assessments. However, in a revised ARR submitted on February 4, 2026, PSPCL drastically lowered the target loss for FY 2026–27 to 10 per cent.

According to PSEBEA, this amounts to an abrupt and unprecedented reduction of 2.75 per cent within a single year. The engineers’ association has stated that such a sharp fall in losses is neither technically feasible nor supported by past trends or existing ground conditions. The letter argues that the revision appears aimed at projecting a reduction in power purchase costs of more than Rs 5,200 crore over three years, thereby showing a lower tariff requirement during the current MYT period.

The association has further objected to the treatment of loss funding amounting to Rs 3,581.95 crore as non-tariff income in the revised ARR. As per the engineers, this defeats the purpose of loss funding under PSERC regulations and presents a distorted financial picture of the utility.

The PSEBEA has pointed out that achieving such a steep reduction in distribution losses would require substantial investment in strengthening the power distribution infrastructure. However, no adequate provisions for such capital expenditure have been made in the approved business plan. In the absence of these investments, the assumptions used in the revised ARR lack credibility, the letter states.

‘A risk to long-term financial stability’

The engineers’ body has warned that this approach could defer financial stress to future years, leading to higher and uncertain tariffs later, ultimately burdening consumers as well as PSPCL. Describing the situation as a risk to long-term financial stability, the PSEBEA has urged the PSPCL management to reconsider the revised projections to avoid structural and financial instability in Punjab’s power sector.

In an order issued on February 6, the PSERC directed PSPCL to submit complete and revised information in connection with its petition seeking approval of the truing-up of the ARR for FY 2024-25 and determination of tariff for FY 2026-27. The directions were issued on petition No. 70 of 2025.

The petition was admitted by the PSERC vide its order dated December 5, 2025. PSPCL had approached the commission under the relevant provisions of the Electricity Act 2003 and PSERC Tariff Regulations.

As per the PSERC order, a public notice inviting objections and suggestions from stakeholders was issued, and public hearings were also conducted. Subsequently, PSPCL filed additional submissions dated February 4, 2026, informing the commission that the distribution loss trajectory for the 4th control period had been revised. In view of this revision, the energy balance and power purchase cost for the 4th control period were also revised, leading to a corresponding revision in the ARR claimed in the petition.

Information provided by PSPCL incomplete

The commission noted that the additional submissions filed by PSPCL have been uploaded on the websites of both the PSERC and PSPCL. However, it observed that the information provided by PSPCL was incomplete. PSPCL was therefore directed to publish a fresh public notice inviting objections and suggestions from the public and stakeholders on the additional submissions filed in the petition.

The PSERC has also asked PSPCL to provide the impact of the revised distribution loss projections on energy balance, power procurement, compliance with renewable purchase obligation (RPO), and computation of green energy tariff, if any. PSPCL was directed to submit its reply to the deficiencies and additional information within one week.

The PSERC further recorded that PSPCL had earlier submitted replies to deficiencies dated December 17, 2025, January 7, 2026, and January 27, 2026, but the information provided therein was also incomplete. PSPCL has been directed to submit complete information at the earliest without any further delay.