Himachal’s Open Power Market Move Could Cost Punjab Up to Rs 400 Crore in Paddy Season

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Punjab is likely to face a major power challenge during the upcoming paddy season after Himachal Pradesh decided to reduce electricity supply under the long-standing power banking arrangement. The move could force the Punjab State Power Corporation Limited (PSPCL) to spend nearly Rs 400 crore to manage rising electricity demand in the state over the next few months.

Officials in the power corporation believe the situation may become difficult between June and August, when electricity consumption traditionally reaches its peak because of paddy cultivation. Farmers across Punjab depend heavily on tubewells for irrigation, and uninterrupted electricity remains essential during this period. This year, demand is expected to cross 18,000 MW, which would be one of the highest levels ever recorded in the state.

The problem has intensified after the Himachal Pradesh Government chose to sell electricity directly in the open market instead of continuing earlier arrangements with neighbouring states. Under the old banking system, Punjab received electricity during high-demand months and returned power later when consumption dropped. The arrangement helped states balance seasonal demand without putting too much financial pressure on power utilities.

Now, Himachal Pradesh is focusing on earning higher revenue by selling its surplus electricity through the open market. Energy experts say the state can earn nearly double or even triple the amount compared to what it received earlier through banking agreements. While the decision may benefit Himachal financially, it has created fresh concerns in Punjab, where officials are already struggling with rising power costs.

According to power sector estimates, Punjab may have to purchase electricity at rates ranging from Rs 8 to Rs 20 per unit depending on market conditions. If prices rise further during peak summer demand, the burden on PSPCL could increase significantly. Officials fear that if solar generation remains low during extreme heat conditions, Punjab may end up paying much more than current estimates.

Every year during paddy season, lakhs of tubewells operate continuously across Punjab to support irrigation needs. The state has over 13 lakh agricultural tubewells, many located in districts where groundwater levels are already under severe stress. As temperatures rise and water demand increases, electricity consumption also jumps sharply.

Power experts believe the latest development could impact regional electricity-sharing arrangements across northern India. States like Punjab have long depended on hydropower-rich regions such as Himachal Pradesh during summer months when agricultural and domestic demand rises simultaneously.

Punjab had earlier initiated talks with other states and private traders to secure additional electricity through alternative arrangements. Officials claim negotiations for 1,500 MW to 2,000 MW of additional power are already underway. Last year too, Punjab relied on external arrangements to manage seasonal shortages.

PSPCL Chairman-cum-Managing Director Basant Garg said the corporation would participate in competitive bidding processes to secure cheaper electricity wherever possible. He confirmed that Himachal Pradesh had offered some electricity through bidding routes while another portion was being sold through open tenders.

The state government now faces the challenge of ensuring uninterrupted electricity supply to farmers without adding excessive financial pressure on the already burdened power sector. With the paddy season beginning from June 1, officials are closely monitoring market prices and power availability to avoid any major disruption.

The coming weeks are expected to be crucial for Punjab’s power management strategy. If demand rises beyond projections and market rates remain high, the state could witness one of its costliest paddy seasons in recent years.