CHANDIGARH: After the amendments to the Electricity Rules, 2005, which aims at ensuring financial sustainability in the power sector, the Punjab government will now have to pay the entire subsidy of Rs 4,600 crore for a quarter in advance to Punjab State Power Corporation (PSPCL).
Else, the subsidised category of consumers will have to pay the entire tariff.
In Punjab, domestic consumption of elections of up to 300 units is free, while farmers are completely exempted from electricity charges. The total power subsidy bill of the state for this financial year is Rs 20,243 crore. This further aggravates the fiscal woes of the cash-strapped state government.
Sources said with the electricity (Second Amendment) Rules, 2023 getting notified, the inability of the state government to pay the subsidy in advance will now force the Electricity Regulatory Commission to issue an order for the implementation of the tariff without subsidy.
The government has cleared its power subsidy bill of Rs 6,762 crore till July 31. The second instalment of Rs 1,804 crore is yet to be paid.
The other major problem is the pending electricity bills of the government departments, especially the local government department, amounting to Rs 3,000 crore to Punjab State Power Corporation Limited (PSPCL). One of the key provisions under the amended rules is related to the accounting and payment of subsidies.
According to the new rule 15, the distribution licensee will now be responsible for accounting for the subsidies payable under section 65 of the Electricity Act, 2003.
To ensure transparency, the state commission will issue a quarterly report for each distribution licensee within 30 days from the end date of the respective quarter. The report will include details on demands for subsidy raised, the actual payment of subsidy, and any gap in subsidy due and paid.
Any discrepancies found in subsidy accounting may lead to appropriate actions against concerned officers of the licensee, in accordance with the provisions of the Act. Additionally, the amended rules introduce a new framework for financial sustainability.
The Aggregate Technical and Commercial (AT&C) loss reduction trajectory for tariff determination will now be approved by the state commission in accordance with the trajectory agreed upon by the respective states and approved by the Centre.
The trajectory for collection and billing efficiency for distribution licensees will also be determined based on the approved AT&C loss reduction trajectory.
The revised rules also allow the inclusion of prudent costs of power procurement and asset creation by distribution licensees.