SUBJECT : Energy

State will sell surplus electricity, buy at lower rates

Under fire for the hike in power tariff, the state government has come up with a roadmap for providing cheaper electricity. Punjab will sell its surplus power, buying cheaper electricity from other generators, besides producing more electricity through hydro, solar and wind power at low rates by setting these power projects outside Punjab. The Power Department has made this plan to reduce the total cost of power production so that in the coming years only three per cent yearly hike in power tariff is required. With decision being taken to shut down the now obsolete power generation plants in Punjab, as a short term measure, till Punjab sets up its own ultra critical power generation plant at Ropar, it has decided to partner with the Solar Energy Corporation of India to produce 250 MW through wind power (at Rs 2.60 per unit) outside Punjab; and getting 200 MW through hydro power from the Kancham Wangtoo project in Himachal Pradesh (at Rs 3.50 per unit). Comparatively, Punjab’s own cost of power production in 2016-17 was Rs 3.97 per unit and in the first six months of 2017-18 this has been reduced to Rs 3.84 per unit. Till the last fiscal, Punjab power utilities were incurring a loss of 70 paisa on each unit of power produced. In the first six months of this fiscal (April to September), by buying cheaper power (463 million units of power have been bought in the first six months), the loss on each unit of power has been reduced to 50 paisa — as revealed in the half-yearly financial results of Punjab State Power Corporation Limited. The reason for the loss to be reduced is not just the increase in power tariff, but also because the cost of buying power from other generators is reduced by 14 paisa per unit. The arrangement to get power from Kancham Wangtoo has been made as the power generation curve of the project matches the power demand curve of Punjab — maximum power will be supplied to Punjab during the peak demand months of June to September, said A Venu Prasad, Chairman of Punjab State Power Corporation Limited (PSPCL). He said a petition in this regard had been filed with the Punjab State Electricity Regulatory Commission (PSERC). The chairman said they were saving Rs 600 crore in interest this year, by swapping high interest loans with low interest loans. “With these measures, we are hopeful to break even by March. The losses of PSPCL were to the tune of Rs 2,400 crore in 2016-17. But by taking commercial decisions, we are set to come out of the red. This year, we have sold 220.78 million units of power (April- September) to other states at Rs 3.93 per unit - much higher than Rs 3.13 per unit - the rate at which power was sold last year,” said Prasad.

Industry rues delay in subsidised power 

  • While course correction in PSPCL is on the way, the industry in Punjab is up in arms against the delay by the government in issuing the notification for giving subsidised power (at Rs 5 per unit) to them from November 1.
  • They are also livid at the government asking them to pay for power at the full tariff from April to October, which will mean that they have to shell out lakhs of rupees as arrears.
  • Officials in the Power Department say that the delay in notification was only to include another sop to the industrial consumers. They will now have one-part tariff till December 31, and not two-part tariff as originally prescribed by the PSERC.

Source: Nov 14, 2017, The Tribune