Punjab Engineers Challenge PSPCL's Unrealistic Power Loss Reduction Targets
The Punjab State Electricity Board Engineers Association (PSEBEA) has issued a stern warning against the Punjab State Power Corporation Limited (PSPCL) over its revised multi-year tariff (MYT) petition. The engineers' body has labeled the proposed reduction in power distribution losses as unrealistic and potentially detrimental to the financial health of Punjab's power sector.
Sharp Revision in Loss Targets Raises Concerns
In a detailed letter addressed to the PSPCL chairman-cum-managing director, PSEBEA General Secretary Ajaypal Singh Atwal has questioned the abrupt changes made to the aggregate revenue requirement (ARR) projections for the control period spanning from FY 2026–27 to FY 2028–29. Copies of this communication have been disseminated to key officials, including the chairman of the Punjab State Electricity Regulatory Commission (PSERC), the power secretary, and the chief secretary.
Initially, PSPCL filed its MYT petition on November 28, 2025, outlining a gradual decrease in distribution losses from 12.75 per cent in FY 2026–27 to 12.20 per cent by FY 2028–29. This plan was based on what the corporation described as realistic assessments of field conditions and operational capabilities.
However, in a revised ARR submitted on February 4, 2026, PSPCL dramatically lowered the target loss for FY 2026–27 to 10 per cent. According to PSEBEA, this represents an unprecedented and sharp reduction of 2.75 per cent within a single year. The association argues that such a drastic fall is neither technically feasible nor supported by historical data or current ground realities.
Financial Implications and Regulatory Scrutiny
The engineers' body contends that this revision appears strategically designed to project a reduction in power purchase costs exceeding Rs 5,200 crore over three years. By doing so, PSPCL aims to show a lower tariff requirement during the current MYT period, which could misrepresent the utility's financial needs.
Additionally, PSEBEA has raised objections to the treatment of loss funding amounting to Rs 3,581.95 crore as non-tariff income in the revised ARR. The association asserts that this move undermines the purpose of loss funding under PSERC regulations and presents a distorted financial picture of PSPCL.
Achieving such a steep reduction in distribution losses would necessitate significant investment in strengthening power distribution infrastructure. However, PSEBEA points out that the approved business plan lacks adequate provisions for such capital expenditure. Without these investments, the assumptions in the revised ARR are deemed lacking in credibility.
Warnings of Long-Term Financial Risks
PSEBEA has cautioned that this approach could defer financial stress to future years, potentially leading to higher and uncertain tariffs later. This would ultimately burden consumers and jeopardize PSPCL's stability. Describing the situation as a risk to long-term financial health, the engineers' association has urged PSPCL management to reconsider the revised projections to prevent structural and financial instability in Punjab's power sector.
In response, the PSERC issued an order on February 6, directing PSPCL to submit complete and revised information related to its petition for truing-up the ARR for FY 2024-25 and determining tariffs for FY 2026-27. This directive was issued under petition No. 70 of 2025, which was admitted by the PSERC on December 5, 2025.
PSPCL had approached the commission under the Electricity Act 2003 and PSERC Tariff Regulations. Following public notices and hearings, PSPCL filed additional submissions on February 4, 2026, informing the commission of the revised distribution loss trajectory for the 4th control period. This revision also impacted energy balance and power purchase costs, leading to corresponding changes in the ARR.
Regulatory Demands for Transparency
The commission noted that while PSPCL's additional submissions were uploaded on both PSERC and PSPCL websites, the information provided was incomplete. Consequently, PSPCL has been directed to publish a fresh public notice inviting objections and suggestions from stakeholders on these submissions.
Furthermore, the PSERC has asked PSPCL to detail the impact of the revised loss projections on energy balance, power procurement, compliance with renewable purchase obligation (RPO), and computation of green energy tariffs. PSPCL must submit its reply to these deficiencies and provide additional information within one week.
The commission also recorded that PSPCL had previously submitted replies to deficiencies on December 17, 2025, January 7, 2026, and January 27, 2026, but these were similarly incomplete. PSPCL has been instructed to submit complete information promptly without further delay to ensure transparency and accountability in the regulatory process.
