Tacking surplus power in Punjab
V K Gupta | 27 Jan 2014

Punjab is likely to face problem in next financial year due to surplus power in state.The three pronged strategy y has been suggested to deal with problem.


Punjab should be able to consume   the  surplus power within  state by reducing tariff on higher consumptions or sell it to power deficit states   and its inability to do so should not be a justification  to hike the tariff.

 Punjab State Power Corporation Limited (PSPCL) as  in its tariff petition for 2014-15  has  loaded it with Rs. 1706 crore as expenditure on account of   the fixed charges to be paid to private generating companies for  surrendering of surplus power. This works out to be additional 44 paise per unit for the power consumer.

PSPCL engineers however estimate that surrendered surplus   power will increase from 12994 MU to 15000 MU  as  the power generation from private sector thermal plants in Punjab has been  estimated by PSPCL on lower side. The fixed charges to be paid by PSPCL to private generators would increase from Rs. 1706 crore to Rs. 2025 crore. The burden on consumers on account of fixed charges will increase from 44 paise per unit to 52 paise per unit.

A solution to this serious problem has to be found out by all of us including the industrialists and all political parties .There may be three possible solutions to this problem.

The solutions include sale of surplus power to other power deficit states  approach the Prime Minister to allow sale of power to Pakistan  or to reduce tariff for higher consumption of power within state.

PSPCL has been trying to sell power to power deficit southern states but has not been able to cut ice so for. Now with the interconnection of southern grid with national grid short term power rates might dip as much as 25 %. The tariff rates are likely to be reduce from current Rs. 5 a unit to Rs. 4 a unit. The power outflow from the new transmission line is going to increase from 500 MW to 1500 Mw after the commissioning of second circuit in next few months.

In case of PSPCL the generation cost of new thermal units is around Rs. 3.35 per unit and with the addition of 70 paise per unit of wheeling charges the power cost to distant south will cross Rs. 4 per unit. The power deficit states may not be interested in buying power exceeding Rs. 4 per unit.

Alternatively  Punjab Government will have to make it's all out efforts to pursue Government of India  for selling power to Pakistan.In case the export of power from Punjab is  allowed Pakistan will have additional benefit of low wheeling charges.


According to official sources the export of 500 MW to Pakistan will be finalized during the meeting of trade ministers of two countries. The federal government of Pakistan has already approved the signing of MoU on electricity trade between two countries.If the proposal is politically accepted it would require at least 6 months materialising the project for completing the technical formalities.

The interconnection would run on 220 KV AC between Amritsar and Lahore  in the beginning phase but would convert to DC on commissioning of the back to back converter station. The export of power may touch 2500 MW after HVDC coupling is completed between two countries as has been done with Bangla Desh.

 The focal authority for Pakistan will be National Transmission and Dispatch Company (NTDC) and for India it is Power Grid Corporation of India Limited (PGCIL).  India has suggested that Power Trading Company (PTC) will act as trading agent yet Punjab Government in Pakistan will be free to make any choice of its convenience.

The last alternative is to supply  additional power to Industrialist and other consumers at cheaper rates barely to recover fixed and variable charges and HT transmission losses  with small profit to sustain PSPCL.. This step will help the state immensely   in industrializing it.

PSPCL should not allow open access to industry on a time slot of 15 minutes basis . Industry has been drawing 1200 to 1250 million units in a year through open access. This step has led to additional 17 paise increase on other industrial consumers.

Punjab should follow the example of Gujarat in the matter of open access where open access is allowed on 24 hour basis. Industry has to intimate the power utility one day in advance about availing of open access.

PSPCL   will have to follow  all the three alternatives simultaneously to save itself and  the consumers from additional burden