PSPCL defends revised distribution loss targets

Patiala: The Punjab State Power Corporation Limited (PSPCL) has formally responded to the objections raised by the PSEB Engineers Association (PSEBEA) over its revised Aggregate Revenue Requirement (ARR) for the upcoming 4th Control Period — FY 2026-27 to FY 2028-29 — with the dispute centred on revised distribution loss targets and the accounting treatment of over Rs 3,581 crore in govt funding.The PSEBEA labelled the PSPCL's new targets as "unrealistic" and "technically unfeasible". In November 2025, the PSPCL originally proposed a distribution loss trajectory starting at 12.75% for FY 2026-27, but later in the revised petition, the PSPCL reduced the target to 10% for the same period after a series of submissions.
The Engineers Association said this represented an "abrupt and unprecedented" reduction of 2.95% in a single year. It alleged the revision attempted to "artificially suppress" the revenue requirement by over Rs 5,200 crore in power purchase costs over three years, deferring financial burdens to future consumers.In its reply to the Punjab State Electricity Regulatory Commission (PSERC) on Feb 26 this year, the PSPCL denied allegations of "slashing" its ARR and said the sharper reduction was justified by a massive, time-bound rollout of infrastructure projects.The PSPCL cited statewide implementation of smart metering under the Revamped Distribution Sector Scheme (RDSS) across Punjab, a new "Unified Billing Solution" and intensive recovery drives against major defaulters, and systematic HT/LT loss reduction works along with strengthening of 11 kV and 66 kV systems.The PSPCL said the works were targeted for completion by March 2027, with the primary impact during FY 2026-27, followed by marginal reductions of 0.05% in subsequent years.The two sides also differed on the treatment of Rs 3,581.95 crore received from the Govt of Punjab as loss funding. The Engineers Association argued that treating the grant as "non-tariff income" negated its purpose, while the PSPCL said its accounting followed Indian Accounting Standards and the Companies Act 2013, and left the final regulatory treatment to the "prudence check" of the Regulatory Commission.The PSPCL said it's roadmap for reducing distribution losses relied on a time-bound infrastructure overhaul aimed at substantial completion by March 2027, including smart metering under the RDSS to improve energy accounting and billing efficiency, and the rollout of a "Unified Billing Solution" to streamline revenue collection and strengthen assurance.The power discom also stated that it launched daily intensive recovery drives targeting defaulting consumers with outstanding arrears exceeding Rs 50,000, and executed HT/LT loss reduction works across Punjab, including a dedicated "Outage Reduction Plan" to strengthen 11 kV and 66 kV systems to minimise outage duration and distribution losses.The PSPCL said it was in the tendering process for LT network revamping within the urban local body (ULB) areas.The utility argued, because the systemic improvements were concentrated in the immediate term, a sharp "one-time" reduction to a 10% loss target was achievable for FY 2026-27, a shift from its original proposal of 12.75% and the commission's previously approved target of 11.80%. It projected that only marginal annual reductions of 0.05% were necessary for the subsequent years of the control period."It appears that before taking the final decision the regulatory commission could not properly determine whether the PSPCL's efficiency gains were achievable or whether they risked the "long-term financial uncertainty" cited by the engineering cadre. Despite the short duration, the power engineers managed to file objections over the PSPCL's revised submissions. It is also surprising that the commission had issued tariff orders ahead of the Punjab govt budget whereas usually the tariff orders are issued by the end of March," said Ajaypal Singh Atwal, general secretary, PSEBEA.MSID:: 129155425 413 |