: PSPCL Engineers Clarion Call: Power sector heading towards a financial and power crisis #WorldNEWSAll Engineers Association of Punjab State Power Corporation Limited (PSPCL) has written an open letter

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PSPCL Engineers Clarion Call: Power sector heading towards a financial and power crisis #WorldNEWSAll
Engineers Association of Punjab State Power Corporation Limited (PSPCL) has written an open letter to Chief Minister Punjab drawing his attention to the impending financial crisis and the consequential power crisis in the state. Here is the full text:
Sir,
It is our bounden duty as a professional body of Power Engineers to caution the Government of the impending financial crisis and the consequential power crisis in the state.
The financial position of PSPCL has been steadily deteriorating particularly due to non-payment of subsidy by Punjab Government and defaulting payments by various Punjab Government departments.
Punjab govt’s annual power subsidy bill in this financial year is expected to cross Rs 19000 crore in 2022-23, which includes free/ subsidised power to industries, agriculture and domestic consumers, that too without considering the backlog subsidy payment of 9020 Cr.
The payments against waiver of defaulting amount by Punjab Government for about 1555 Cr is pending for almost one year. Due to non payment of electricity bills by Punjab Government departments the defaulting towards Punjab Government has exceeded 2600 Cr. The power sector of Punjab is heading towards a man-made financial and power crisis.
Sir, the concerned authorities in the Punjab Government have deliberately underestimated the expenditure on power subsidy by almost 7000 cr. Now with no budget provision for this big gap in expenditure, PSPCL is being forced to arrange funds on its own by loans from banks and financial institutions at high interest rates.
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This lending will increase the overall cost of power for the ordinary consumers. Fuel Cost Adjustment (FCA), a major component of the tariff and allowed by PSERC time-to-time to compensate for the inflation in coal prices, has been kept pending by the Punjab Government.
For the first time in the history of Punjab, Govt has denied FCA which is another unrecoverable hole in the finances of PSPCL.
Sir, if PSPCL fails to arrange sufficient funds through loans to cover these gaping holes in its finances, and thereby failing to procure sufficient electricity, coal, materials or defaults in payment for electricity purchase during the coming summer season, people of Punjab will have to face serious power shortages and blackouts in the coming paddy season.
It is pertinent to mention here that this severe financial crisis has already resulted in PSPCL defaulting in its contractual obligation of Payments to Large Industries which will further lead to litigation and interest payments to such suppliers.
The inordinate delay in taking final decision on filling the very important posts, which could have planned to work-around this man-made crisis, i.

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