Pricey Paradox | J&K spent Rs 63,000 crore in 11 years despite hydropower riches

Srinagar, Oct 13: In a concerning revelation, Jammu and Kashmir’s power purchases from external gencos have cost a staggering Rs 63,000 crore over the past 11 years, despite possessing substantial hydropower potential.

Official data accessed by Greater Kashmir highlights the persistent challenge of the region’s reliance on external power sources.

According to the official data, the power purchase bills from external power distribution companies (discoms) reached a cumulative total of Rs 63,000 crore from the fiscal year 2012-13 to 2022-23.

The most recent data indicates that in the financial year 2022-23, the J&K government spent over Rs 8200 crore on purchasing electricity from external sources.

The fiscal year, 2021-22, saw an expenditure of Rs 8197 crore for 16,207 million electricity units, while 2020-21 witnessed the purchase of 14,362 million units costing Rs 7047 crore.

In 2019-20, 13,345 million units were purchased for Rs 6987 crore.

This trend remained the same with power purchases amounting to Rs 6561 crore in 2018-19; Rs 4844 crore in 2017-18; Rs 4752 crore in 2016-17; Rs 4803 crore in 2015-16; Rs 4719 crore in 2014-15; Rs 3959 crore in 2013-14; and Rs 3382 crore in 2012-13.

The data also indicates a consistent rise in expenses for purchasing power from outside the region over the years.

The persistent power crisis in J&K has been attributed to a substantial gap between the revenue generated by the Power Development Department (PDD) and the funds required for power purchases.

Chief Secretary Arun Kumar Gupta recently said that the government had borrowed Rs 31,000 crore to settle outstanding power bills with external power generators.

A senior official from the PDD said that the J&K government’s liability of Rs 31,000 crore was primarily due to significant Aggregate Transmission and Commercial (AT&C) losses, which stood at a staggering 55 percent.

Speaking about the power procurement scenario, the official said that in the previous fiscal year, J&K purchased 20,400 million electricity units.

“It’s crucial to highlight that the government has to pay in advance for power purchases, as per the Power Purchase Agreements (PPAs) with various generation companies, including central and J&K Gencos. Failing to do so could lead to power disruptions,” he said. “In case of shortage, we buy power at an exorbitant rate. As compared to consumption (20,400 million units) in the last financial year, we are anticipating a 10 percent increase this year, which will be over 22,000 million units.”

The J&K government has now set a target to double the hydropower generation capacity in the next few years from the existing capacity of 3500 MW.

“In this direction, 5 mega hydro-power projects – Ratle (824 MW), Kirthai-II (930 MW) Sawalakote (1856 MW), Dulhasti-Stage II (258 MW), and Uri-I Stage-II (240 MW) having a total capacity of 4134 MW have been taken up for execution in collaboration with the National Hydroelectric Power Corporation (NHPC). The likely investment in these projects is Rs 34,882 crore and on completion would make J&K power surplus. The delay in execution of the projects has been eliminated and the pace of execution accelerated,” the official document of the J&K government said.