Punjab may create separate power utility for generation
Umesh Dewan
Tribune News Service

Patiala, March 18
The Punjab Government is contemplating to carve out a third power utility (generation company) from the Punjab State Power Corporation Limited (PSPCL), it is learnt. Though there has been no written communiqué between the officials of the Punjab Power Department and the Power Corporation, but highly placed sources in the PSPCL as well as in the Punjab Government have confirmed that talks are on for setting up a separate generation company.

However, a considerable section of the officers and the employees working with the PSPCL are against the creation of the third power utility in the form of a generation company. It is pertinent to mention that in compliance of the Central Electricity Act, 2003 and as a part of the power governance reforms, on April 16, 2010 the state government had bifurcated the Punjab State Electricity Board (PSEB) to set up two power utilities - the Punjab State Power Corporation Limited (PSPCL) and the Punjab State Transmission Corporation Limited (PSTCL).

At the time of unbundling, the state government had announced that a financial restructuring plan for improving the fiscal health of the cash-strapped Power Corporation would be finalised and the interests of the entire staff would be taken care of. However, almost two years down the line, the government has failed to bail out the Power Corporation from the debt-trap. Apart from this, many of the promises made by the state government during the unbundling remain unfulfilled. Moreover, there is lack of coordination between the two existing power utilities. Officers were of the opinion that if another company was constituted, it would further aggravate the problem of proper coordination between the power utilities.

Despite repeated attempts, Punjab Power Secretary Anirudh Tiwari was not available for comments. However, some of the officers of the PSPCL, while preferring anonymity, said, "The only reason for the state government to create a separate generation company may be to draw more loans for different power companies from the financial institutions, thus pushing the power sector into vicious debt-trap."

Meanwhile, the non-gazetted employees working with the PSPCL have also announced that in case the state government proposes to carve out the generation company, they would strongly oppose it. Making it clear that they would oppose any move to set up a separate generation company, representatives of the PSEB Employees Joint Forum, a conglomerate of several employees unions, said that there was no logic in carving out a new generation company.

Secretary of the Forum, Manjit Singh Chahal said that already the fiscal health of the power utilities was in a bad state. It would not be a wise step to put more financial burden by making the top brass of the Power Corporation management heavy, he said. "The bifurcation of the PSEB has failed to increase the revenue of the power utilities. Besides, there has been no success in bringing down the transmission loses," he asserted.

Engineers' association to oppose the move

HS Bedi, president of the PSEB Engineers' Association, said the independent power generation company would have its own maintenance schedules and it would not bother about the demand of power in the state. "With PSPCL facing serious payment problems due to precarious financial position, payments to generating company will be the last priority, thereby seriously affecting the financial position of the generation company, as has happened in Haryana recently. Hence, we will strongly oppose the setting up of a new generation company", he added.

Coordination will be hampered, says expert

All India Power Engineers Federation (AIPEF) chairman Padamjit Singh said in the generation and distribution functions in a company, it is possible to flex generation to match state requirement and ensure economy in grid operation. "With separation of functions, there will be a tendency to maximise generation, irrespective of grid conditions, which could have repercussions of the order of several hundred crores per year loss to the distribution company. The nature of business of electricity supply entails close coordination of generation and demand, which would be the biggest casualty in case of a separate generation company," he said.