15% electricity duty  withdrawn to nullify tariff hike: Principal Secretary PDD  

Jammu, Nov 24: Principal Secretary Power Development Department (PDD) H Rajesh Prasad Friday stated that the “strategic move” of withdrawal of 15 percent Electricity Duty (ED) would nullify the impact of 15 percent power tariff hike.

“This calculated decision will ensure that the tariff hike would not hit consumers and there would be no increase in their final electricity bill,” he said, while addressing a press conference here.

He also stated that the Lieutenant Governor had given approval for purchase of over 2400 MWs of power through PPA from NTPC and SPCI to meet the shortage, besides 500 MW as base load power under the central government’s Shakti policy.

He pointed out that the demand going up during winters was a usual phenomenon. The power demand in Jammu and Kashmir at present was 3200 MWs while the in-house generation availability was only 1350 MWs.

With regard to withdrawal of 15 percent ED, Prasad said that it would be effective from December 1, 2023, following the issuance of a new tariff order by the Joint Electricity Regulatory Commission (JERC), Jammu & Kashmir.

“The JERC, after thorough consideration and adherence to standard procedures, implemented a 15 percent tariff hike while maintaining fixed charges at their existing levels. The revised overall tariff rate remains below the actual procurement cost incurred by the corporations in supplying power to consumers,” he said.

While referring to reform journey vis-a-vis the restructuring of the power department by unbundling the departmental structure into two Distribution Companies (DISCOMS) and a Transmission Corporation, he said that this long-awaited reform aligned Jammu & Kashmir with other Indian States/UTs, ensuring enhanced consumer services while ensuring the sustainability of the power sector.

To facilitate this restructuring, a substantial financial package of Rs. 5000 Crores was allocated for the comprehensive upgrade of infrastructure under various Central Sector Schemes. This investment aims to create adequate capacities in almost every district, providing regular and quality power supply to citizens, he informed.

To ensure that the newly formed corporations are provided with a clean balance sheet, all the outstanding dues on account of power purchase, accumulated to the tune of Rs. 30700 Crores over several years, were taken over by the Government and cleared by availing soft loans under GOI Schemes like Atmanirbhar Bharat and LPS Rules 2022. Accordingly, a conducive platform has been provided to the discoms to operate on sound business principles and deliver optimal services to consumers, thereby enhancing overall consumer satisfaction levels, Prasad said.

“In the present system as well, the discoms continue to grapple with high losses attributed mainly to power theft, poor metering and low tariff rates, which are a major cause of concern not only for the department but also threaten the overall efficiency of the sector. The high Aggregate Technical & Commercial (AT&C) losses, reaching 44% in Jammu and 58% in Kashmir as compared to the national average of 16.44%, have left DISCOMS unable to meet power purchase expenses, leaving aside other critical expenditures like Operations & Maintenance (O&M) and capital investments, which still continue to be supported by government,” he said.