‘78% hike needed to overcome revenue gap of Rs.2723 Crore’
There is a whopping Rs.2723 Crore revenue gap incurred by power Discoms by supplying the power at existing tariff to the consumers across J&K.
As per the Joint Electricity Regulatory Commission (JERC) for Jammu Kashmir and Ladakh report Jammu Power Distribution Corporation Limited(JPDCL) has a revenue gap of 998. 79 Crore for the financial year 2022-23 and while that of Kashmir Power Distribution Corporation Limited (KPDCL) is much higher at 1724.31 Crore for the same period.
The Commission has observed that if the unmet revenue gap is to be met by increasing the tariff in Jammu license area and Kashmir license area uniformly, then there will be around 78% hike in present tariff which will be a tariff shock for all categories of the consumers in the UT of J&K. The Commission noted that as per Section 65 of the Act, if the State Government requires the grant of any subsidy to any consumer or class of consumers in the tariff determined by the State Commission, then the State Government requires to pay the same in advance.
The Commission has not received any communication from the UT of J&K Government in this regard.
The Commission has also noted that a trajectory for reduction of AT&C losses up to 15% by FY 2019 20 was fixed by erstwhile JKSERC for turnaround of the power sector under the UDAY scheme. Further, similar target of AT&C loss reduction has been envisaged under Ministry of Power DSA (MOP) scheme: Revamped Reforms-based and Results-linked, Distribution Sector Scheme (RDSS). To achieve the targeted AT&C loss level as envisaged under RDSS scheme, the petitioners have to take necessary steps to arrest the distribution loss in its supply area.
Pertinently, the average rate of power purchase for the UT of Jammu and Kashmir is Rs.4.54 per unit and the Aggregate Technical and Commercial Loss for the FY 2021-22 stands at 46 % for Jammu division and 60% for Kashmir region against the prescribed ceiling of 20%. Infrastructural improvements, technological interventions such as smart metering and a revised yet simplified tariff schedule are keys to improving the financial health of the distribution companies. The department aims, with all necessary interventions, to bring the losses within the acceptable limits and to provide 24*7 electricity to all consumers by 2025.
The tariff has been revised with an aim of providing round the clock power supply to the people of Jammu and Kashmir as well reduce the massive losses. The JERC has also kept the tariff rates lower for Jammu and Kashmir than other State or UT across the country.
Notable to mention, that the rates for industrial categories vary from a minimum of Rs.4.70 to a maximum of Rs.7.75 per kVAh in the neighbouring states of Himachal Pradesh, Uttarakhand, Punjab, Haryana and Delhi. In order to ensure incentivize industrial development, the price of the highest rate slab of industrial supply has been kept less than the lowest rate slab in any neighboring state.
