Punjab: Electricity company is struggling with pending subsidy and increasing theft

Punjab: Punjab Rajya Vidyut Nigam Limited (PSPCL) has posted a profit despite non-payment of subsidy bills on time by the Punjab government, rising power theft and non-payment of bills for power consumed by several departments. In 2024, PSPCL posted a profit of Rs 2,685 crore during the peak season ending in October, as against a profit of Rs 565 crore during the same period last year. This was possible due to supply of coal from Pachwara coal mine, which has improved thermal generation not only at Ropar and Lehra Mohabbat but also at the newly acquired Goindwal plant. PSPCL procured a 540 MW GVK thermal plant at a competitive cost of Rs 1,080 crore, ensuring reliable and cost-effective power supply to consumers. Post profit, PSPCL has envisaged a minimum increase of only 10 per cent in tariff for 2025-26, the lowest in the last 15 years. The Punjab State Electricity Regulatory Commission (PSERC) will analyse and examine the documents submitted by PSPCL and fix the tariff before March 31, 2025. Besides, the government has withdrawn the subsidy of Rs 2.50 per unit given to consumers with load up to 7 kW.

Challenges

The rising demand for power this paddy season, which has crossed 16,000 MW, has been a cause of concern. The surge is attributed to changing weather patterns, a spurt in economic activity and rising demand from the agriculture sector. In the recent paddy season, the state faced a shortage of 900 MW, resulting in unscheduled rotational power cuts across the state. “The power demand is likely to increase by about 4,000 MW in the coming years at an estimated rate of 7 per cent every year. There is an urgent need to set up two supercritical units of 800 MW each at Ropar thermal plant and a solar plant at Bathinda, said a former chief engineer of PSPCL.

Power theft

Despite domestic consumers getting free power, power theft has attained alarming levels. The losses touched Rs 2,600 crore in 2023-24. The state government gives a subsidy of over Rs 6,000 crore in lieu of 300 units of free power and Rs 1,400 crore was given to domestic consumers in lieu of a rebate of Rs 2.50 – up to 7 kW load. PSPCL has 20 notorious theft-prone divisions, which account for half of the revenue deficit of Rs 2,600 crore. The maximum power theft takes place in the border area, followed by the west and south zones.

Financial challenge

On the financial side, the Punjab government is delaying subsidy payments and recoveries from several defaulting departments. The outstanding subsidy bill is Rs 4,500 crore, while the previous subsidy dues and outstanding power bills of government departments are Rs 5,500 crore and Rs 3,600 crore, respectively. The Punjab government has paid subsidy of Rs 12,758 crore to PSPCL till December 15.