Patiala: A sharp regulatory confrontation between Punjab State Power Corporation Limited (PSPCL) and the state power watchdog, the Punjab State Electricity Regulatory Commission (PSERC), has ended with the public utility withdrawing a controversial commercial policy after facing the prospect of punitive legal action. PSPCL withdrew the commercial circular after the PSERC declared it invalid and initiated action over alleged non-compliance.The dispute centred on a PSPCL circular that allowed large electricity consumers operating from separate, non-contiguous premises to share private cluster sub-stations, which PSERC ruled violated existing electricity regulations. On Jan 8, this year, PSPCL issued commercial circular (No. 01/2026) introducing a facility for high-tension (HT) and extra-high-tension (EHT) consumers. It permitted groups of subsidiary companies, partnerships, or trusts with a combined contract demand exceeding 5,000 kVA to jointly install and maintain a 33 kV or higher cluster sub-station even when their premises were geographically separate. Under the framework, PSPCL would construct 11 kV feeders from the cluster sub-station to individual participating consumers at their cost. Feeder lengths were capped at 500 metres and were subject to certification by a technical committee. Only underground XLPE cables were allowed, and overhead conductors were barred.
PSERC objected to the move, stating it already rejected a similar proposal in Oct 2025 on legal grounds. The commission said PSPCL attempted to amend binding regulations on its own authority, which it said was impermissible under the Electricity Act, 2003. In its directive, the Commission declared the circular “void ab initio,” ordered its immediate withdrawal, and stated that even without formal revocation the policy would be treated as legally non-existent. PSERC escalated the matter on Feb 16 after PSPCL did not respond within the stipulated period or withdraw the circular. It initiated a suo-motu petition under Section 142 of the Act, citing “willful contravention”. The provision carried penalties of up to Rs 1 lakh per violation, along with continuing daily fines. A formal hearing was scheduled for February 25.However, on Feb 17, the Chief Engineer/Commercial issued a memorandum withdrawing Commercial Circular No. 01/2026 with immediate effect.Key developments: October 2025, PSERC rejected PSPCL’s proposal for cluster sub-stations serving non-contiguous premises; January 8, this year, PSPCL issued Commercial Circular No. 01/2026 authorising the facility; February 3, PSERC declared the circular void and ordered withdrawal; February 16, suo-motu proceedings were initiated for non-compliance; and February 17, PSPCL withdrew the circular.The withdrawal meant cluster sub-station arrangements across non-contiguous properties remained impermissible unless formally approved through regulatory amendment. Power experts and industry observers said the development reinforced regulatory discipline in the power sector while clarifying that utilities could not introduce policy shifts that effectively overrode established rules. MSID:: 128557207 413 |
