No tariff increase for FY 2024-25, electricity bill subsidies to continue: Govt

Srinagar, July 24: In a major relief to power consumers, the J&K Power Development Department (PDD) today announced that the Jammu & Kashmir government has taken a significant decision to absorb any increase in electricity tariff in the current financial year (2024-25) by continuing its support in the form of subsidy on electricity bills.

The decision of the government will effectively offset any rise in tariff requirements as projected by the Distribution Companies (discoms) i.e. JPDCL for Jammu region and KPDCL for Kashmir region, for covering the rising power purchase cost, inflation and other factors and also to bridge the revenue gap, read an official handout, issued today.

Providing details on the decision, the spokesperson of J&K Power Development Department (PDD) informed that a major portion of discoms expenditure constitutes of the power purchase cost, which is rising day by day due to rise in coal prices. Therefore, such escalations in power purchase costs demand increase in power tariff too. Besides, the discoms incur other sizeable expenditures also such as the O&M costs for its expanding infrastructure.

In absence of any intervention of the Government, the aforesaid expenses would have otherwise been passed on to consumers. He further informed that although a proposal for tariff increase for FY 2024-25 has been submitted by the discoms to the Joint Electricity Regulatory Commission (JERC) for approval, the government's decision indicates that there will effectively be no tariff increase for consumers, with the estimated loss on that account being borne by the government.

Speaking about the current tariff in Jammu & Kashmir, which is among the lowest in the country, the spokesperson provided an overview of the tariff revision history. It was highlighted that after a gap of six years without any tariff hike, there was an around 17% increase in electricity tariffs implemented in October 2022.

In the tariff revision for FY 2023-24, although metered consumers faced a 15% tariff hike, the government balanced this out by removing the 15% Electricity Duty on energy charges resulting into no net rise in consumer bills. Likewise, for the current financial year (2024-25), Jammu & Kashmir has again refrained from increasing electricity tariffs.

He further mentioned that, in addition to alleviating any additional financial burden on consumers, the department is on a war footing to bring about numerous reforms in the sector under Revamped Distribution Sector Scheme (RDSS) for ensuring better quality and reliable power supply to consumers. This will empower the consumers with better control over their budget through transparent and real time monitoring of their consumption patterns, facilitated by smart meters.

The smart consumer metering is being implemented at a rapid pace to eliminate unmetered consumers, which are significant contributors to high AT&C losses.

Notably, J&K, which had a metering percentage as low as 50% in 2019, now ranks among the top seven states in the country for smart metering implementation, having surpassed the six lakh mark. Despite the improvements observed in smart-metered areas, challenges remain with unmetered consumers, particularly in Kashmir.

To address losses in the unmetered (flat-rate) areas, discoms are conducting calibrated load rationalization based on actual electricity usage and connected loads, ensuring adherence to Electricity Supply Code regulations to prevent inflated bills. Additionally, other reforms such as the 100% segregation of agricultural feeders, High Voltage Distribution Systems (HVDS), AB cables in congested areas, and state-of-the-art SCADA and RT-DAS systems are also under implementation, which will not only automate the system but also fulfill consumer expectations of the today’s modern era.

In this regard, the discoms have been directed to adopt best practices in accordance with Electricity (Rights of consumers Rules) 2020, notified by the MoP, with the aim to ensure that consumers receive reliable and high-quality electricity services.

With the aforementioned initiatives and an investment of Rs. 5,600 crore under RDSS over the next two years, the UT is poised to bring about a complete turnaround in the power sector, with the ultimate goal of providing 24x7 uninterrupted and affordable power supply for all consumers.