Excelsior Correspondent
JAMMU, Jan 19: Explaining difficulties in reducing unjustifiable operation and maintenance (O&M) expenses in 10 old Hydroelectric Projects, the Power Development Corporation (PDC) has urged the State Electricity Regulatory Commission (SERC) to bail it out of the extra financial burden by giving certain relaxations in the clauses governing calculation of operation and maintenance expenses while finalizing Annual Revenue Requirement (ARR) and Generation Tariff for 2013-14 financial year.
Official sources told EXCELSIOR that there has been no let up in the unjustifiable operation and maintenance expenses in 10 old Hydroelectric Projects being run by the Jammu and Kashmir State Power Development Corporation and every year there is huge gap between the actual expenditure being incurred on operation and maintenance of these projects and the funds sanctioned for the same leading to financial burden on the Corporation.
Taking serious note of unjustifiable O&M expenses in case of these 10 HEPs which include Karnah, Iqbal Bridge, Bazgo, Sumoor, Hynder, Haftal, Igo Mercellong, Sumoor and Hunder, the State Electricity Regulatory Commission had directed the PDC to adopt a cost effective model followed by other similar utilities and make efforts to reduce their O&M expenditure on the ground that unjustifiably high expense was leaving an adverse impact on the overall AFC and indicative tariff, sources said.
“The PDC, in its application for Annual Revenue Requirement (ARR) and Tariff Petition for 2013-14 financial year, has explained the practical difficulties coming up in the way of reducing the O&M expenditure of these projects”, sources said, adding “the Corporation has urged the SERC that in view of unavoidable difficulties, the applicable clauses of J&K SERC Regulations, 2011 for calculation of operation and maintenance expenses should be relaxed to the extent of allowing O&M as per actual so as to enable the PDC to recover its expenses”.
The Corporation has held constraints in generation, problems encountered due to T&D network in evacuation of power and excessive staff behind much higher actual cost of operation and maintenance in comparison to O&M calculated and allowed as per SERC Regulations.
Elaborating further, PDC said, “these projects are being operated in isolated mode, without grid connectivity, catering to highly fluctuating domestic load and accordingly resulting in sub-optimal functioning and high maintenance costs due to frequent breakdowns caused by sudden load throw off”, adding “though hydro power projects are otherwise too prone to vagaries of nature, these projects have the additional drawback that they do not have permanent head-works and protection structures. Thus the diversion structures are usually subjected to damages due to monsoon and flash floods and require additional capital investment regularly”.
“Despite substantial gap in revenue and expenditure, these projects justify their operation on examination from commercial, environmental as well as, most importantly, social angle”, the PDC said, adding “these plants are very relevant to the region as they produce clean and green energy in far flung and remote areas where the primary alternative source of energy (diesel generation) is not only very costly but also inimical to the fragile ecosystem”.
The PDC further said, “most of the small projects inherited by the PDC from PDD along with the staff are facing a problem of excessive staff resulting in increased O&M expenditure. Since efforts made by the Corporation for redeployment of staff have faced resistance on parochial consideration reliable action in deployment of staff in such projects can be possible over a period of time”, adding “the expenditure on account of excessive staff can be reduced through various efforts such as rationalization of posts and enhancing the employee productivity for which action has already been initiated. The restructuring process is being undertaken through the consultant M/s Ernst & Young”.
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