PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO NO. 220-221, SECTOR 34-A, CHANDIGARH.

 

              Date of Order:   27-05-2008

 

In the matter of : Subsidy (to all categories of consumers for) neutralizing the increase in the tariffs for the year 2007-08.

 

Present:                                    Shri Jai Singh Gill, Chairman

                                                Smt. Baljit Bains, Member

                                                Shri Satpal Singh Pall, Member

 

ORDER

 

            The Commission in its Tariff Order dated September 17,  2007 for the year 2007-08 approved tariffs of the Punjab State Electricity Board(Board) for various categories of consumers as per annexure. The tariffs were made applicable with effect from September 1,  2007 and with the increased tariff, recovery of additional revenue of Rs.423.78 crores was envisaged. Out of this additional revenue, an amount of Rs.131.12 crores was on account of  increase in tariff for AP consumers against  which full subsidy  was payable  by the Government of Punjab. The Government in its letter dated September 10, 2007 had committed to pay Rs.2548.73 crores as subsidy determined by the Commission during the year 2007-08 including the additional revenue of Rs.131.12 crores  accruing from enhanced AP tariff w.e.f.  September 1, 2007. The Commission in another order dated September 13,  2007 passed in compliance with the directions  of the Appellate Tribunal dated May 26, 2006  decided that the Government will make payment of subsidy in quarterly instalments at the beginning of each quarter and the amount to be paid to the Board for each quarter will be 1/4th of the total amount of subsidy payable in  a particular year as determined by the Commission.

2.         The Chief Secretary to the Government of Punjab in a letter dated December 3, 2007 conveyed the decision of the Government to neutralize the effect of  enhanced tariff to all categories of consumers and to compensate the Board in line with Section 65 of the Electricity Act, 2003. The subsidy payable by the Government on this account was worked out as  Rs.292.66 crores (Rs.423.78 crores - Rs.131.12 Crores) and a  proportionate  part thereof amounting to  Rs.167.23 crores was  required to be paid alongwith the amount of subsidy payable upto the 3rd quarter of the year.

3.         In view of this, the Government was asked to confirm the  payment of Rs.1243.32 crores to the Board as subsidy due  on 1.1.2008  to enable the Commission to pass necessary directions to the Board under Section 65 of the Act for neutralizing the effect of enhanced tariff to all categories of consumers. Government in its letter dated 4.3.2008 intimated its decision  to recall  an amount of Rs.1362 crores out of overdue loans of Rs.2342.80 crores and to allow the Board  to retain this amount of Rs. 1362 crores against outstanding amount of subsidy upto March 31, 2008. This included subsidy of Rs.292 crores to be paid for  neutralizing the effect of enhanced tariff as per order dated September 17, 2007 of the Commission.

4.         The Board was requested  by the Commission in its letter dated March 10,  2008 to confirm receipt of subsidy and its credit to the  revenue account  to  enable the Commission in proceeding  further in the matter. After protracted correspondence, the Board has in its letter dated 9.5.2008 confirmed that it has received subsidy of Rs.2848.04 crores which included Rs.1362 crores on account of recall of loan by the Government. 

5.         Before proceeding to take a view on payment of the total subsidy amount due from the Government to the Board, it is necessary to consider  whether or not the Government could recall its loans from the Board and then make those resources available for payment of arrears of subsidy. In this regard, the Commission takes note of its own order passed on September  13, 2007 in compliance with the directions given by the Appellate Tribunal in its order of  26.5.2006. Para 3.9 and 3.10 of the Commission’s above mentioned order dwell upon both the manner in which the Government will make payment of subsidy as well as the question of subsidy payable being adjusted against Government loans to the Board. The Commission had held that subsidy would be paid in  quarterly instalments  and that it would be inappropriate “if any adjustement of outstanding subsidy is  effected against outstanding Government loans to the Board”. It is, at the same time, important to appreciate the context in which the Commission reached these conclusions. The Appellate Tribunal’s directions were given in the backdrop of the Government’s alleged reluctance to pay Rural Electrification Subsidy (R.E.) and other subsidies with the implicit suggestion that if this be so, the Commission may permit the Board to suitably adjust the same against the outstanding loans of the Government. In that context, the Commission had observed that it would be inappropriate for the Commission to order any adjustment in this manner. The eventuality of the Government withdrawing overdue amount of its own loan and making it available for payment of subsidy arrears never came up for consideration in the said order nor was it adjudicated upon. In fact, the Commission had, in general, observed that adjustment of loans against payment of arrears is inappropriate because a loan is usually granted under mutually agreed terms and conditions  and either side is expected to abide by such terms and conditions of payment and repayment of loan. Seen in this light, it is difficult to conclude that the Government is not within its rights to call back overdue loans from  the Board. This is specially so when the Board has neither objected to the call back of overdue loan by the Government nor  pleaded that it is against the mutually agreed terms and conditions. In the event, the Commission concludes that the Government is within its rights to call back overdue loans to the Board if it chooses to do so. It is possible that such actions on the part of the Government would have repercussions on the Board in so far as its borrowing power is concerned as also its ability to raise additional resources from the market to a corresponding extent, but  these are  issues which are to be mutually resolved between  the Government and the Board.

6.         In the light of the above discussions, the Commission concludes that payment of subsidy to the extent of Rs.2848.04 crores including Rs.292.66 crores for neutralizing the increase of tariff for 2007-08 has indeed been effected by the Government as accepted and confirmed by the Board. Therefore, it is hereby ordered that the  Board will charge the tariffs from all categories of consumers from September 1, 2007 to March 31, 2008 without enhancement.

 

 

            Sd/-                                                     Sd/-                                         Sd/-          

(Satpal Singh Pall)                             (Baljit Bains)                            (Jai Singh Gill)

Member                                              Member                                    Chairman    

 

Place: Chandigarh

Dated: 27-05-2008

                                                                ANNEXURE

 

Table 6.6: Existing and Proposed Tariff for the year 2007-08

 

 

Sl. No.

Category of consumers

Existing Tariff

Tariff approved by the Commission - w.e.f. September 1, 2007

 

Energy Rate P/KWH

MMC Rs./ KW or part thereof

Energy Rate P/KWH

MMC Rs./ KW or part thereof

 

A)

PERMANENT SUPPLY

 

1

Domestic

 

a)

Upto 100 units

221

30

240

33

 

b)

101 to 300 units

368

394

 

c)

Above 300 units

389

416

 

2

Non-Residential

423

109

453

117

 

3

Public lighting

423

As per 8 hrs / Day

453

As per 8 hrs / Day

 

4

Agricultural Pumpsets

i) Without Govt. subsidy 214 Ps / kwh or Rs. 208/ BHP / Month

N.A.

i) Without Govt. subsidy 240 Ps / kwh or Rs. 236/ BHP / Month

NA

 

ii) With Govt. subsidy     0

ii) With Govt. subsidy     0

 

5

Industrial

 

a)

Small power

337

89

361

95

 

b)

Medium

372

119

398

127

 

c)

Large

 

 

 

 

 

i)

General industry

372

119

398

115 /KVA

 

ii)

PIU

372

328

398

316 /KVA

 

iii)

Arc Furnace

372

312

398

300 /KVA

 

6

Bulk Supply (including MES)

 

 

HT

382

179/KVA

409

192 /KVA

 

LT

406

179/KW

434

192 /KW

 

Average

394

 

422

 

 

7

Railway Traction

443

179/KVA

474

192 /KVA

 

B) SEASONAL INDUSTRY : COTTON GINNING, PRESSING AND BAILING PLANT, RICE SHELLERS / HULLER MILLS, RICE BRAN STABILIZATION UNITS (WITHOUT T.G. SETS) (SP, MS, LS)

 

a)

During Season (From 1st Sept to 31st May next year)

 

 

 

 

 

 

SP

337

328

361

351

 

 

MS

372

328

398

351

 

 

LS

372

328

398

316 /KVA

 

b)

Off season

 

 

 

 

 

 

SP

400

NA

428

NA

 

 

MS

431

NA

461

NA

 

 

LS

428

NA

458

NA

 

 

C) ICE FACTORY & ICE CANDIES AND COLD STORAGE

 

a)

Season (April to July)

 

 

SP

337

447  
(April to July)

361

478

 

 

MS

372

398

478

 

 

LS

372

398

430 /KVA

 

b)

Off Season

 

 

SP

337

89

361

95

 

 

MS

372

89

398

95

 

 

LS

372

89

398

86 /KVA

 

D) GOLDEN TEMPLE, AMRITSAR AND DURGIANA TEMPLE, AMRITSAR

 

 

Golden Temple, Amritsar

 

a)

First 2000 units

Free

N.A.

Free

N.A.

 

b)

Beyond 2000 units

301

N.A.

322

N.A.

 

 

Durgiana Temple, Amritsar

 

a)

First 2000 units

As per pattern applicable for Golden Temple, Amritsar

As per pattern applicable for Golden Temple, Amritsar

 

b)

Beyond 2000 units

 

E) TEMPORARY SUPPLY

 

i)

Domestic

663

Rs.551 or Rs.110/KW whichever is higher

709

Rs.590 or Rs.118/KW whichever is higher

 

ii)

NRS

663

Rs.1102 or Rs.276/KW whichever is higher

709

Rs.1179 or Rs.295/KW whichever is higher

 

iii)

Industrial (SP,MS & LS)

As per tariff approved at A(5) above for permanent supply + 100%

Rs.441/KW of sanctioned load

As per tariff approved at A(5) above for permanent supply + 100%

Rs.472/KW of sanctioned load  for SP and MS and Rs. 425/KVA for LS

 

iv)

Wheat Thresher

-do-

-do-

-do-

-do-

 

v)

Fairs, exhibition & melas Congregations

Bulk supply tariff as at A(6) + 50%

Rs.4411 per service

Bulk supply tariff as at A(6) + 50%

Rs.4720 per service

 

vi)

Touring Cinemas

 

a)

Lights and fans

663

For (a) and (b) Rs. 1102 or Rs. 276/KW of sanctioned load whichever is higher

709

For (a) and (b) Rs. 1179 or Rs. 295/KW of sanctioned load whichever is higher

 

b)

Motive load

Rate for Industrial permanent supply as at A(5) + 100%

Rate for Industrial permanent supply as at A(5) + 100%

 

NOTES

 

 

 

 

 

 

 

I

Domestic consumers belonging to SC category with connected load upto 1000 watts will be given 200 units of free power per month in view of Govt. subsidy;

 

ii

Non-SC BPL Domestic Consumers with connected load upto 1000 watts will be given 200 units free power per month in view of Govt Subsidy;

 

iii

 AP consumers and consumers mentioned in (i) & (ii) will not be charged service charges and meter rentals in view of Govt.subsidy;

 

iv

DS and NRS consumers shall continue to be charged MMC on the basis of actual sanctioned load and no rounding off should be carried out for computing the MMC;

 

v

Demand Surcharge in respect of Large Supply Industrial Consumers for exceeding sanctioned contract demand shall be charged @ Rs. 750/- (instead of Rs. 250/-) per KVA of contract demand in excess of sanctioned contract demand w.e.f. next billing cycle.

 

vi

All other charges including rentals and deposits which are being collected by the Board as per the "Sales Regulations for Supply of Energy to Consumers" and General Conditions of Tariff & Schedules of Tariff approved by the Commission, will be continued at the existing rates till these are reviewed by the Commission;

 

vii

Checking of load of DS consumers shall continue to be suspended.