Punjab Power Regulator Directs Fresh Public Consultation on Revised PSPCL Revenue Plan
Patiala: The Punjab State Electricity Regulatory Commission (PSERC) has issued a directive requiring the Punjab State Power Corporation Limited (PSPCL) to upload revised financial submissions on official websites and issue a fresh public notice inviting stakeholder objections. This order, dated February 6, follows PSPCL's submission of a revised Aggregate Revenue Requirement (ARR) and distribution loss projections earlier this month.
Revised Projections and Regulatory Scrutiny
PSPCL filed additional submissions on February 4, significantly revising the ARR initially submitted on November 28, 2025. The revisions sharply lowered projected distribution losses, which in turn reduced the government's subsidy requirement. However, this move has drawn criticism from power sector experts and engineers, who warn it could undermine PSPCL's financial stability.
In its February 6 order, PSERC noted that the revised submissions altered the energy balance, power procurement costs, and the claimed ARR. Consequently, the commission directed PSPCL to upload these documents on both PSERC and PSPCL websites and issue a new public notice to gather objections and suggestions from stakeholders. PSERC also mandated PSPCL to submit monthly details on power demand during night versus daytime and exchange prices to justify their proposals.
Unrealistic Loss Reduction Targets Raise Concerns
The Punjab State Electricity Board Engineers Association (PSEBEA) has strongly criticized the revised projections. In a letter to the PSPCL Chairman and Managing Director, the association termed the projected 2.75% reduction in distribution losses as unrealistic.
"In the revised ARR, PSPCL proposed loss levels of 10% for FY 2026–27, 9.95% for FY 2027–28, and 9.90% for FY 2028–29 without providing for any additional capital investment," stated Ajaypal Singh Atwal, General Secretary of PSEBEA. "This implies a reduction from 13.12% in FY 2024–25 to 10% in FY 2026–27—a nearly 2.75 percentage point drop in a single year."
Atwal further highlighted that PSPCL downwardly revised its ARR by Rs 1,259 crore and proposed treating loss funding of Rs 3,581.95 crore received under a Government of India scheme as non-tariff income, an accounting treatment he argued defeats the purpose of loss funding support. "Taken together, PSPCL effectively reduced its ARR by around Rs 4,800 crore without citing any concrete justification or outlining a credible investment roadmap," he added.
Election Year Fiscal Pressures and Subsidy Burden
The revisions come against the backdrop of an election year in Punjab, where the state government has announced additional welfare measures, including universal health insurance coverage of Rs 10 lakh and monthly assistance of Rs 1,000 to women above 18 years. Power sector officials acknowledge that existing subsidy commitments already strain state finances, raising concerns that short-term fiscal maneuvers are being prioritized over structural reforms.
PSPCL had initially filed its Multi-Year Tariff (MYT) petition for the control period FY 2026–27 to FY 2028–29 in November 2025, under sections of the Electricity Act, 2003. This included true-up for FY 2024–25 and ARR forecasts for the fourth control period. PSERC admitted the petition on December 5, 2025, and public hearings were held after issuing a public notice.
Notably, PSPCL revised its loss projections despite PSERC having already approved the utility's Business Plan for FY 2026–27 to FY 2028–29 through an order dated December 11, 2025. Under MYT Regulations, PSERC had approved distribution loss trajectories of 11.8%, 11.6%, and 11.4% for the three years, along with corresponding capital expenditure requirements.
Regulatory Deficiencies and Future Implications
In its February 6 order, PSERC flagged deficiencies in PSPCL's submissions and directed the utility to furnish additional information. This includes the impact of revised loss projections on energy balance, power procurement (Format D3), Renewable Purchase Obligation compliance, and Green Energy Tariff computation. PSPCL was also instructed to submit detailed data on proposals such as enhancing sanctioned load for small power consumers and justifying Time-of-Day tariff proposals.
The commission noted that replies earlier submitted by PSPCL against deficiencies raised on December 17, 2025, and January 7, 2026, were incomplete and directed the utility to submit complete information without further delay.
While the revised ARR offers temporary fiscal relief to the Punjab government, power sector analysts caution that unrealistic projections could lead to revenue shortfalls for PSPCL. They warn that such shortfalls might necessitate additional borrowings or, during subsequent true-up exercises, result in higher tariffs, ultimately placing a heavier burden on electricity consumers in the future.
