No hike in electricity bills for consumers , Waived off 15% Electricity Duty in existing tariff: PDD J&K

No hike in electricity bills for consumers , Waived off 15% Electricity Duty in existing tariff: PDD J&K

JAMMU: PDD J&K Official said that no hike in electricity bills for consumers , Waived off 15% Electricity Duty in existing tariff.

The Press statement reads " In the recent years, the PowerDevelopment Department hasembarked upon a series of reformswith the primary objective ofdelivering improved and high-qualitypower supply to consumers at anaffordable price. Among thesereforms, a significant stride has beenthe restructuring of powerdepartment by unbundling the departmental structure into various corporations viz. two Distribution Companies (DISCOMS), one each inJammu and Kashmir, and aTransmission Corporation.

 The unbundling of department was along-pending reform as almost allIndian States/ UTs had corporatizedtheir power sectors decades ago, withthe aim to enhance consumerservices while ensuring sustainabilityof the sector as a whole.

Besides, a substantial financial package of Rs. 5000 Crores was utilizedby the department for the comprehensive up-gradation of infrastructureunder various Central Sector Schemes, so that adequate capacities arecreated in almost every district to provide regular & quality power supply tothe citizens. To ensure that the newly formed corporations are provided witha clean balance sheet, all the outstanding dues on account of power purchase,accumulated to the tune of Rs. 30700 Crores over several years, were takenover by the Government and cleared by availing soft loans under GOISchemes like Atmanirbhar Bharat and LPS Rules 2022.

Accordingly, aconducive platform has been provided to the discoms to operate on soundbusiness principles and deliver optimal services to consumers, therebyenhancing overall consumer satisfaction levels. 

In the present system as well, the discoms continue to grapple withhigh losses attributed mainly to power theft, poor metering and low tariffrates, which are a major cause of concern not only for the department butalso threaten the overall efficiency of the sector. The high AggregateTechnical & Commercial (AT&C) losses, reaching 44% in Jammu and 58% inKashmir as compared to the national average of 16.44%, have left DISCOMSunable to meet power purchase expenses, leaving aside other criticalexpenditures like Operations & Maintenance (O&M) and capital investments,which still continue to be supported by Government.

For ensuring financial sustainability of power sector, even GOI haslaunched schemes like Revamped Distribution Sector Scheme (RDSS) whereunder conditional grants linked to the performance of discoms on certain predefined parameters have been provisioned. The parameters which arerequired to be maintained for mainting the proper fund-flow under theschemes, the DISCOMS need to implement crucial measures such as adoptingcost-reflective tariffs, reducing AT&C losses, reducing ACS-ARR Gap andvarious other reforms to ensure financial sustainability of the sector, therebyensuring uninterrupted power supply in line with the evolving living standardsof consumers. In today’s modern era, as the entire country progressestowards a digital India with a focus on on-demand services, the power sectoris no exception. It is analogous to any other commodity we purchase from themarket, where the consumer pays, and the seller provides.

Fundamentally,consumers seek nothing more than uninterrupted power supply, whether theyare urban or rural consumers. Additionally, it is the duty of every utility tomeet the expectations and needs of the consumers it serves. 

Consequently, considering all the factors and following the regularprocedures which also include holding of public hearings, the Joint ElectricityRegulatory Commission (JERC), Jammu & Kashmir, has issued a new TariffOrder for consumers today effective from 1st December 2023. On perusal ofthis Tariff order, it has been found that the commission has affected a 15%increase in the existing tariff. However, no change has been affected on thefixed charges. It is pertinent to note that the overall tariff rate still remainslower than the actual cost at which the corporations procure power forsupplying to the consumers. 

However, to ensure that the tariff hike does not impact the electricitybill of the consumers, the Govt. of J&K has taken a considerate decision towithdraw the Electricity Duty (ED), which was previously being levied at 15%on energy charges in the existing tariff. As a result, the overall impact on theelectricity bill of consumers would be nil, which is explained with the help of asample calculation in the subsequent paragraph. 

Considering a domestic consumer who consumes 500 units ofelectricity in a month and having agreemented load of 5 kW. The comparisonof his electricity bill as per the existing tariff and new tariff notified today hasbeen given in the table below, for the sake of clear understanding of the consumers.