Cut Plan Draws Notice From PSERC

The Punjab state electricity regulatory commission (PSERC) has forwarded a notice to the Punjab administration on its move to alter return on equity in power financial support to be offered to Punjab State Power Corporation Limited (PSPCL).

Admitting an appeal by retired electricity board engineer Gurnek Brar, the power watchdog has asked the state administration and the PSPCL for answers by June 4.

It will take notice of the appeal on June 11. Gurnek has objected to the Punjab administration’s verdict to fine-tune return on equity against power funding that the government gives to the power corporation in lieu of free electricity to the agriculture sector and below poverty line (BPL) families.

The adjustment of return on equity against cash subsidy amounts to a dividend of 15.5% on the equity to the state government. However, the PSPCL, which is under losses already, cannot be needed to provide a dividend to the equity possessor, the requester has stated, looking for that the state administration be provide a month to forward the due subsidy for the years 2011-12 and 2012-13, stood at Rs. 304.46 crore and Rs. 412.39 crore, respectively.

Before the commission each year, the Punjab administration commits to making the full payment of subsidy but on March 28, 2013, the joint secretary (finance) had planned that for 2012-13, the return on equity of Rs. 405.73 crore was to be modified against subsidy.

In its tariff order for the year 2009-10, the PSERC had stated that the return-on-equity was payable to the owner only if the utility was in profit and the amount was available.

“In a situation where the PSPCL has made huge losses, the question of paying return on equity to the government does not arise,” it had said.

In case the state administration plows ahead and alters the return on equity in the financial support for 2012-13, there is every chance of its doing it in the existing fiscal year as well, fears Brar.