The financial viability of the Punjab State Power Corporation Ltd. (PSPCL) remains a concern
as this solely depends upon the ability of the Punjab government to pay for the payments
 which it committed in lieu of various power-related welfare schemes, timely payment of full subsidy
amount   and clearance of arrears against various government departments.
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As per the decision of the Punjab Government, PSPCL has issued the order on October 13, for waiving  
the defaulting amount  of  consumers with a connected load of up to 2KW
which is around Rs. 1200 crore. Further, the connection of those consumers who have been disconnected for nonpayment will be reconnected without any additional cost. The additional cost to be incurred by PSPCL for reconnecting the disconnected connections ar Rs. 1500 per connection will be between 10 to 15 crore.
The government has now allowed the 300 units of free power to SC/BC/BPL domestic categories
instead of  200 units of free power every month. This will involve an additional expenditure of Rs. 800 crore.
On paper,for both these welfare schemes the government has committed to pay PSPCL Rs. 2000 crores.
The PSERC has to approve any change in the annual tariff plan before it can be implemented in the state.


With the above populist schemes, the Punjab government will have to pay now more than 20000 crores annually to PSPCL.
This is more than 60% of PSPCL,s annual revenue requirement of about Rs. 33000 crore.
PSERC has worked out a subsidy payment of   RS. 17796 crore including arrears of last year for providing free power to the agriculture sector, free  200 units every month to SC/ST/BPL
category of consumers with connected load up to 2 KW, and subsidized power for industry.

There are 72 lakhs domestic consumers in Punjab and out of these  53 lakhs consumers have connected load up to 2KW.
The consumers with a load of 2KW getting already free power of 200 units are around 22 lakhs.
There are 16 lakhs consumers whose average monthly consumption is less than 200 units per month and the rest
6lakh consumers average consumers is more than 200 units per month.
Now with the enhancement of free power from 200 to 300 units per month, the consumers with a connected load of
 2 KW and using 300 units will increase to 20 lakhs and those using more than 300 units will be 2 lakhs.

According to PSPCL officials, the total outstanding arrears against defaulters is around Rs.4000 crore and half of the amount of around Rs.2000 crore is against government departments. The defaulting amount against the industry is not a major amount. The defaulting amount against domestic consumers may be more than .1500 crores..
The maximum number of  defaulting consumers amongst PSPCL  circles in merit order  are Bhatinda, Jallandhar, Muktsar, west
 City Ludhiana and suburban Amritsar circle. The amount in major defaulting circles of  Muktsar, Jullundur, and Bhatinda is
between 100 to 135 crores each.
PSPCL has reported a profit of Rs.1,446 crore for 2020-21 despite not getting the complete power subsidy
including arrears as worked out by PSERC. It is further not clear whether any amount of coal washing charges of about Rs.1600 crore were paid last financial year. In this financial year,
the payment of revised pay scale and allowances to employees and pensioners will also worsen the finances of PSPCL.
Although the power distribution losses have been reduced considerably, yet PSPCL  is losing Rs 1,200 crore every year to power theft in the state’s politically sensitive areasTaran Taran and Amritsar circles in the border zone are the two circles of PSPCL
 where power theft is a way of life for the last so many years. The unchecked continuous theft of power in Punjab is basically supported by the politicians of all shades which is causing huge losses to the PSPCL. This fact is known to the administration who has turned a blind eye to the politically sensitive issue. There is a need for political will to tackle this problem.
The Punjab government has been defaulting for the last so many years on complete payment of subsidy as worked out by the PSERC. Now the government only talks of the annual requirement of subsidy and does not talk about the pending arrears of subsidy.

 PSPCL has always been fighting a financial crunch owing to power subsidies, default in payment of power bills by
government departments, Due to delay in receipt of payments from the government, PSPCL is compelled to take heavy loans
which adds to its financial burden.