PSERC allows PSPCL to charge applicable tariff for governments failure to pay complete subsidy

June 11, 2018 05:06 PM

Punjab News Express/Vinod Gupta 
CHANDIGARH: Punjab State Electricity Regulatory Commission (PSERC) has allowed the Punjab State Power Corporation Limited (PSPCL) to charge the applicable tariff from the respective subsidized category in case Punjab Government fails to disburse the entire subsidy as per its tariff order of April 19.

Padamjit Singh, Chief Engineer (Retd.) of erstwhile Punjab State Electricity Board had filed a petition before PSERC regarding non-payment of subsidy in full by the Punjab Government during financial year 2016-17 and 2017-18. The petition has mentioned that the subsidy default of FY 2016-17 to be paid upfront in FY 2017-18 as subsidy is by law an advance payment that cannot be spread over next year. PSERC has today its order on Padamjit Singh petition.

PSERC noted with concern that there is a shortfall of payment by the Punjab Government on account of subsidy for financial year 2016-17 and 2017-18. The subsidy payable as on 31st March, 2017 was `2918.67 crore which has increased to `4768.65 crore as on 31st March, 2018. Government informed the commission that its financial position of the State Government is not good.

Punjab Governments submission that payment of interest on delayed payment takes care of the delay in the payment of subsidy is not appropriate, as such defaults by the State Government violate section 65 of the Electricity Act, 2003 . This also is affecting the cash flow position of the PSPCL and its ability to make payment for expenditure related to salaries, repair & maintenance, power purchase and other important expenses. Moreover, the utility is unable to raise working capital loans over and above the limit prescribed under the UDAY Scheme.

Default of payment by the government on account of subsidy affects the credibility of the utility before the banks/financial institutions. PSPCL is a utility fully owned, controlled and managed by the Government of Punjab, thus, it becomes even more imperative for the State Govt. to release the subsidy in a timely manner.


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