Punjab heading towards man-made power and financial crisis: engineers’ body

The association fears that the financial crisis of PSPCL may aggravate if the Punjab government doesn't clear the pending subsidies and power bills of the government departments.

He also lauded the role played by Dera Ballan in the social and economic well-being of the masses. (Express Photo)

Listen to this article

00:00

1x 1.5x 1.8x

“The Punjab government’s annual power subsidy bill for the financial year 2022-23 is expected to cross Rs 19,000 crore which includes free/subsidised power to agriculture, domestic and industrial consumers. If pending amount is not cleared, Punjab’s power sector could head towards a man-made financial and power crisis, said members of Punjab State Electricity Board (PSEB) Engineers’ Association.

In a communication to Punjab chief minister, the engineers’ association questioned the state government for its calculation regarding power subsidy, which the government has to pay to Punjab State Power Corporation Limited (PSPCL), as according to the association, the government has ‘deliberately’ under-estimated the subsidy amount by almost Rs 7,000 crore and now there is no budget provision to fill this huge gap. PSPCL is being forced to arrange these funds on its own by taking loans from banks and financial institutions at high interest rates, said the engineers in the communication to the CM. This lending will increase the overall cost of power for ordinary consumers, they added.

The association fears that the financial crisis of PSPCL may aggravate if the Punjab government doesn’t clear the pending subsidies and power bills of the government departments.

Story continues below this ad

The association said the state government owes a total of Rs 14,176 crore to PSPCL. If corrective measures are not taken well in time, the state can have tough summers, and consumers could face power interruptions and blackouts. The engineers hinted that the ‘man-made’ crisis will be fatal if the Punjab government does not deal with it well in time.

Out of this Rs 14,176 crore, Rs 9,020 crore is the pending subsidy amount for financial year 2021-22, Rs 2,600 crore is the outstanding amount due to non-payment of electricity bills by the Punjab government departments and another Rs 1,555 crore is the payment against waiver of defaulting amount by the Punjab government. In 2021, the then CM Charanjit Singh Channi had waived off the defaulting amount of a section of consumers which was Rs 1,555 crore, and that amount has never been paid back by the Punjab government to PSPCL, said the association.

Fuel cost adjustment (FCA), a major component of tariff and allowed by Punjab State Electricity Regulatory Commission (PSERC) from time to time to compensate for the inflation of coal prices, had earlier been kept pending by the Punjab government.

“For the first time, the Punjab government has denied FCA which is another unrecoverable hole in the finances of PSPCL. If PSPCL fails to arrange sufficient funds through loans to cover these holes in finances, it will be difficult to procure sufficient electricity, coal materials, etc. Hence, people of Punjab will have to face serious power shortage and blackouts in the coming paddy season,” said members of PSEB engineers association in the letter to the CM.

Stay updated with the latest - Click here to follow us on Instagram