The Punjab State Electricity Regulatory Commission (PSERC) Friday announced a reduction in electricity tariffs across various consumer categories in the state for the financial year 2026–27. The revised tariffs, which will come into effect from April 1, 2026, provide relief to domestic, commercial, industrial and other consumers in the state.
The relief being extended to consumers will cost the power utility Rs 7,851.91 crore, even as the state exchequer is already burdened with an annual power subsidy bill of Rs 22,200 crore. While the domestic sector gets free power supply up to 300 units, agriculture pump sets are given free power in the state. The total bill amounts to over Rs 20,000 crore.
PSERC stated consumer interest has been prioritised by passing on the gains of operational efficiency through reduced tariff schedules across all categories while maintaining the financial viability of Punjab State Power Corporation Ltd (PSPCL). The move is also expected to reduce the burden of government subsidies and improve the state’s fiscal sustainability.
Overall, the revised tariff structure results in substantial financial relief for electricity consumers in Punjab, with the Commission passing on benefits arising from operational efficiencies and surplus revenue to consumers across all major categories.
Explaining the slashing of power prices, the order said that PSPCL projected a revenue deficit of Rs 453 crore up to FY 2026-27 and sought a tariff increase. However, after a detailed scrutiny and prudence check, the Commission calculated the total revenue requirement for FY 2026-27 at Rs 48,996.28 crore.
While the power utility will bear the burden of the tariff cut, the state government will benefit. The maximum relief, a reduction of Rs 1.50 per unit, has been given to consumers using up to 300 units of electricity. These consumers already receive free power, with the government paying the utility’s bill as part of the subsidy.
Similarly, the tariff for agricultural pump sets has been reduced by Rs 1.32 per unit, with the government also bearing this cost. “This will help the state government save money from power subsidy and pay Rs 1,000 per month to women,” said a source.
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While addressing the media about the cut, Punjab Power Minister Sanjeev Arora said this will not burden the power utility, and will reduce transmission losses.
A source in PSPCL told The Indian Express that this is the first time the tariff order has been passed before March 31. “The new tariff order will bring the power subsidy bill down. This figure will reflect in the budget proposal on Sunday. Had they issued the tariff on March 31, the figure would have been different in the budget,” said the source.
With a surplus of Rs 7,851.91 crore arising from the true-up of FY 2024-25 and projections for FY 2026-27, and existing tariff revenue estimated at Rs 52,791.41 crore, the Commission determined that only Rs 44,939.50 crore needs to be recovered through tariffs. As a result, consumers will benefit from an overall relief of Rs 7,851.91 crore.
Domestic, commercial and industrial consumers
For domestic consumers, the tariff reduction varies by load category and consumption slab. Households with connected load up to 2 kW will see a reduction of Rs 1.55 per unit for consumption up to 300 units, while usage above 300 units will see a reduction of Rs 0.70 per unit.
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Consumers with a load of 2-7 kW will get a reduction of Rs 1.47 per unit for consumption up to 300 units, and Rs 0.70 per unit for consumption above that limit. Similarly, domestic consumers with a load of 7-20 kW will benefit from a reduction of Rs 1.44 per unit for the lower slab and Rs 0.70 per unit for higher consumption. For consumers with a load above 20 kW and up to 100 kVA, the tariff has been reduced by Rs 0.55 per unit, while those with a load above 100 kVA will see a reduction of Rs 0.56 per unit.
In the non-residential or commercial category, consumers with a load of up to 7 kW will receive a reduction of Rs 0.79 per unit for consumption up to 500 units and Rs 0.65 per unit for usage above 500 units. Commercial consumers with a load of 7-20 kW will get a similar reduction of Rs 0.79 per unit for the lower slab and Rs 0.65 per unit for higher consumption.
For those with a load above 20 kW, the tariff has been reduced by Rs 0.50 per unit, while consumers with a load above 100 kVA will benefit from a reduction of Rs 0.51 per unit. Electricity tariffs for electric vehicle charging stations have also been reduced significantly by Rs 1.28 per unit, bringing the rate down to ₹5.00 per kVAh.
Industrial consumers will also see tariff relief. In the small power category, applicable to loads up to 50 kVA, the energy charge has been reduced by Rs 0.12 per unit. In the medium supply category covering loads between 50 kVA and 100 kVA, the tariff has been reduced by Rs 0.42 per unit. Large consumers and general industry consumers will see a reduction of about Rs 0.70 per unit, while power-intensive units will benefit from a reduction of Rs 0.70-0.74 per unit, depending on their load category.
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Bulk supply, agricultural consumers
Bulk supply consumers have also received tariff cuts. For low-tension bulk supply, the tariff has been reduced by Rs 0.55 per unit, while high-tension bulk supply consumers will see a reduction of Rs 0.66 per unit. Railway traction tariffs have been reduced by Rs 0.60 per unit, and public lighting tariffs by Rs 1.00 per unit.
Agricultural consumers using pumpsets will benefit from a reduction in fixed charges, lowered from Rs 492 per BHP per month to Rs 395 per BHP per month, resulting in a reduction of Rs 97 per BHP per month. High-tech farming consumers will see a reduction of Rs 1.32 per unit in energy charges.
Tariffs for compost plants, solid waste management facilities and water supply schemes have been reduced by Rs 0.15 per unit, while charitable hospitals will receive a reduction of Rs 0.10 per unit. In addition, the tariff for start-up power supplied to generators and captive power plants has been reduced by Rs 0.41 per unit.
To promote ease of doing business, the limit under the Small Power category has been increased from up to 20 kW to up to 50 kW, allowing small enterprises to scale operations without significant infrastructure changes. Additionally, the tariff for electric vehicle charging has been reduced to Rs 5.00 per kVAh, one of the lowest in the country, to accelerate the adoption of electric mobility in the state.
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The Commission has also expanded certain consumer benefits. Electricity connections for lawyers’ chambers registered with the Bar Council of Punjab and Haryana and located within court complexes will now fall under the Domestic Supply category. Similarly, registered bed-and-breakfast and homestay units that use electricity solely for residential purposes will also be billed under the domestic tariff schedule.
To encourage efficient power usage, the voltage rebate for consumers receiving supply at 400 kV has been increased from 35 paise to 40 paise per kWh. Meanwhile, the special night tariff scheme for industrial consumers has been continued, offering 50 per cent fixed charges and energy charges of Rs 5.50 per kVAh for electricity used between 10 pm and 6 am.
PSERC has also retained the Time-of-Day (TOD) tariff structure from June 16 to October 15 with an unchanged surcharge of Rs 2 per kVAh during peak periods. Additionally, the green energy tariff has been sharply reduced to Rs 0.15 per kWh from Rs 0.39 per kWh last year to encourage industries to adopt renewable energy through open access.
