PATIALA: The law of supply and demand determines the unit price of a particular item in all markets across the world. More the supply less is the price. However, Punjab seems to be defying the basic law of microeconomics as despite being power surplus, the state has increased the cost of electricity by 6.68 % to 12.20%, prompting several protests across the state.
Per unit cost of power in Punjab has gone up between Rs 4.98 (previously Rs 4.52) and 7.36 (previously Rs 6.56) for the domestic supply and from Rs 7.10 (previously 6.53) to Rs 7.47 (previously 6.75) for commercial establishments. The cost of power for the industrial sector has also gone up by 8.5% to 11.88% as compared to the last year.
Punjab has a total installed capacity of 10,590.38 MW of power including 7,087.82 MW of fuel-based units and 3,648.55 MW of renewable sources. The total power available to the state is 11,054 MW, which also includes the state’s shares in several power projects outside its territory. Even after shutting down the Bathinda thermal power plant, the state still has 10,594 MW of power at its disposal which is more than required to meet its requirements during non-peak seasons.
The power demand during most of the year floats around 6,000 to 8,000 MW, other than the paddy season when this demand rises above 11,500 MW. This year, the highest demand met was 11,681 MW on July 11. During rest of the year, the state has a surplus power of 1,500-3,000 MW.
Meeting this increased demand was hardly a challenge for the PSPCL which had entered into a number of sub-contracts to purchase additional power for a short duration ranging from a few days to a couple of months. During the peak season, this year, the PSPCL had around 1,35,000 MW of power available through these sub-contracts.
It even managed to earn a profit of around Rs 25 crore over a period of 15 days by selling its surplus power to other states as the demand soared during the month of September. Power was even sold at Rs 9 per unit, with an average rate of Rs 4.6 per unit.
However, during other months, the demand for power in open markets remains low and the state is unable to sell its surplus power as the average generation cost of one unit of electricity in Punjab is calculated between Rs 3.10 to Rs 3.20, but the same is available in the open market at Rs 2.25 to Rs 2.5 a unit during non-peak seasons.
According to the highly placed sources in the Power Corporation, increase in power tariffs in Punjab is inevitable due to the high working capital of the Punjab State Power Corporation (PSPCL). This year, the PSPCL is expecting a revenue generation of Rs 27,142.43 crore as against a net revenue requirement of 32,718.64 crore, which leaves a gap of Rs 5,576.21 crore. To fill this gap, the corporation has no other means but to claim tariff hike as revenue from the sale of power is its only source of income, the sources said.
As per the Multi-Year Tariff Petition (MYTP) for the controlled period of the year 2017-18, the corporation had calculated its spending on power purchase to be Rs 17,988.67 crore and on generation Rs 4,508.44 crore, which sums up to a total of Rs 22,497.11 crore.
The remaining revenue requirement is because of other factors including interest on outstanding loans which is Rs 3,462.61 crore for the current fiscal, employee cost which is Rs 4,338.57 crore and various other components, the sources said.
These sources said that cost of power could only come down if the state government would introduce measures to bring down the net revenue requirements of the PSPCL. They said closing in debts, which are now over Rs 31,000 crore, could substantially reduce this requirement, which could even get converted into relief for the power consumers of the state.
Source: timesofindia.indiatimes
