1. In the recent years, the Power Development Department has embarked upon a series of reforms with the primary objective of delivering improved and high-quality power supply to consumers at an affordable price. Among these reforms, a significant stride has been the restructuring of power department by unbundling the departmental structure into various corporations viz. two Distribution Companies (DISCOMS), one each in Jammu and Kashmir, and a Transmission Corporation. The unbundling of department was along-pending reform as almost all Indian States/ UTs had corporatized their power sectors decades ago, with the aim to enhance consumer services while ensuring sustainability of the sector as a whole.
2. Besides, a substantial financial package of Rs. 5000 Crores was utilized by the department for the comprehensive up-gradation of infrastructure under various Central Sector Schemes, so that adequate capacities are created in almost every district to provide regular & quality power supply to the citizens. 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.
3. 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
4. For ensuring financial sustainability of power sector, even GOI has launched schemes like Revamped Distribution Sector Scheme (RDSS) where- under conditional grants linked to the performance of discoms on certain pre- defined parameters have been provisioned. The parameters which are required to be maintained for maintaining the proper fund-flow under the schemes, the DISCOMS need to implement crucial measures such as adopting cost-reflective tariffs, reducing AT&C losses, reducing ACS-ARR Gap and various other reforms to ensure financial sustainability of the sector, thereby ensuring uninterrupted power supply in line with the evolving living standards of consumers. In today’s modern era, as the entire country progresses towards a digital India with a focus on on-demand services, the power sector is no exception. It is analogous to any other commodity we purchase from the market, where the consumer pays, and the seller provides. Fundamentally, consumers seek nothing more than uninterrupted power supply, whether they are urban or rural consumers. Additionally, it is the duty of every utility to meet the expectations and needs of the consumers it serves.
5. Consequently, considering all the factors and following the regular procedures which also include holding of public hearings, the Joint Electricity Regulatory Commission (JERC), Jammu & Kashmir, has issued a new Tariff Order for consumers today effective from 1stDecember 2023. On perusal of this 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 the fixed charges. It is pertinent to note that the overall tariff rate still remains lower than the actual cost at which the corporations procure power for supplying to the consumers.
6. However, to ensure that the tariff hike does not impact the electricity bill of the consumers, the Govt. of J&K has taken a considerate decision to withdraw 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 the electricity bill of consumers would be nil, which is explained with the help of a sample calculation in the subsequent paragraph.
7. Considering a domestic consumer who consumes 500 units of electricity in a month and having agreemented load of 5 kW. The comparison of his electricity bill as per the existing tariff and new tariff notified today has been given in the table below, for the sake of clear understanding of the consumers.
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