Agriculture and Industry will not survive in Punjab


Getting power supply through open access (OA) facility in Punjab has turned costlier for large industrial groups with the Punjab State Electricity Regulatory Commission (PSERC) imposing cross subsidy surcharge of 74.48 paise per unit on OA consumers.
While framing new guidelines for OA Regulations 2011, PSERC, in its latest order posted on its website, has proposed to levy cross subsidy surcharge of 74.48 paise per unit from July 1, in order to prevent financial loss to state owned power utility Punjab State Power Corporation Limited (PSPCL).
"With the high end consumers migrating to OA without paying any surcharge, the burden on distribution licensee (PSPCL) increases, which ultimately results in increase in tariff of remaining about 70 lakh consumers... If this loss is passed on to the remaining consumers it will result in an unjustified hike in the tariff for these consumers," the order says.
The punjab industry termed the move as "unwarranted" and "anti-industry" and said it would lead to exit of existing industries to other states.
PSPCL had projected a loss to the tune of Rs 1,000 crore in 2011-12, with high end energy consumers buying cheaper power from other states via OA system.
Under the OA system, big industrial units can buy power from other sources other than state power utility.
Over 200 large industrial groups in Punjab had bought 2,500 million units last year through OA facility which was far more than what industry purchased in Haryana, Rajasthan, Gujarat and Madhya Pradesh in 2010-11.
Companies like Nahar Spinning, Steel Strips, Hero Cycles, Nestle India, Lakshmi Energy are OA consumers.
PSPCL had accused that OA consumers treat it as a standby supplier and had said that large industrial houses switched over to open access facility whenever energy was cheaper in other states and then came back to power utility when rates got higher there.
Besides, PSERC has also levied wheeling charges on OA consumers. For OA customers with 66 KV voltage, wheeling charges would be 17.4 paise and for 11 KV, charges would be 34.8 paise per unit.
The new charges came barely two months after PSERC raised power tariff by 8 per cent for the industry for the year 2011-12.
Peeved over the levy of cross subsidy charges, Punjab industry said it would force power intensive industry verticals like steel, textiles and chemicals to migrate to other states.
"Levy of cross subsidy surcharge will kill the industry here... now industry representatives will look for setting up units in other states which are offering incentives like cheap power," Nahar Spinning MD Dinesh Oswal told PTI.
The industry feels levy of surcharge will make OA facility costlier by up to 98 paise per unit which will not be viable option to draw power from other states.
"Power is costliest in Punjab in the country where electricity duty, octroi is also imposed. It will force the industry to shut down their businesses here," Modern Steels Chairman Amarjit Goyal said.
Tags: open access, Punjab, Punjab State Electricity Regulatory Commission, OA Regulations 2011, PSERC, Punjab State Power Corporation Limited, PSPCL