*SERC directives not being taken seriously
Mohinder Verma
JAMMU, July 25: The Power Development Department’s concern for rising revenue gap has remained confined to the official statements only as no seriousness has so far been shown towards finalization of proposed new power tariff, which according to the department’s own estimates would generate additional revenue of over Rs 500 crore. Moreover, the concerned officers of the department are groping in dark about the budgetary allocation from the Government for meeting revenue gap of Rs 3065.62 crore.
This can be gauged from the slackness of the concerned officers of the department in furnishing requisite information to the Jammu and Kashmir State Electricity Regulatory Commission during the past over six months despite repeated reminders as a result of which power tariff for the current financial year is unlikely to be finalized till September ending.
As per Sub-Regulation 4 of Regulation 47 of J&K SERC (Conduct of Business) Regulations, 2005 and Sub-Regulation 2 of Regulation 12 of JKSERC (Multi Year Distribution Tariff) Regulations, 2012, the Power Development Department is required to file the petition for tariff proposals before the Commission on or before November 30 every year.
However, despite issuance of advance notice by the SERC to the PDD on October 15, 2015 followed by several reminders, the concerned authorities of the department continued to delay the matter on unfounded grounds and the petition for new power tariff was filed on March 3, 2016 (nearly four months after the stipulated period).
Keeping in view time constraints, the SERC admitted the petition on March 9, 2016 and initiated necessary action. The Commission also sought certified information/documentary evidence of the budgetary allocation from the Government for meeting the revenue gap of Rs 3065.62 crore projected by the department for the Financial Year 2016-17.
However, instead of furnishing the required information the concerned authorities of PDD continued to create roadblock in finalization of new tariff by the SERC. This is evident from the fact that PDD filed a petition seeking extension of applicability of tariff of FY 2015-16 for a further period of one month—for the month of April 2016.
On April 27, the PDD again moved an application seeking further extension in time to furnish the requisite information on the ground that the letter from the Government confirming budgetary support was awaited.
The Commission while taking serious note of the stance of the Power Development Department extended the applicability of tariff of last financial year up to ending June in order to facilitate the department to raise energy bills. However, the Commission made it clear that any adverse impact on the revenue of PDD due to seeking of repeated extensions of the applicability of 2015-16 tariff order shall have to be absorbed by the utility.
Astonishingly, two days back the PDD against moved an application before the Commission with the request to extend the applicability of tariff of 2015-16 for a further period of three months-up to September 30, 2016 on the ground that information sought by the Commission was still awaited from the Government.
All this indicates that the Commercial and Survey Wing of the Power Development Department is groping in dark about the budgetary support from the Government to meet the revenue gap of Rs 3065.62 crore. “This also establishes that PDD’s concern over rising revenue gap has remained confined to the official statements”, sources remarked.
It is pertinent to mention here that Actual Annual Revenue Requirement for the FY 2014-15 was Rs 5726,92 crore but the Revenue assessed was Rs 1813.72 crore resulting into Revenue gap of Rs 3913.19 crore.
Similarly, as per Revised Estimates, the ARR for FY 2015-16 was to the tune of Rs 6,016.94 crore but the Revenue assessed at the existing rate was to the tune of Rs 2590.43 crore resulting into Revenue gap of Rs 3426.50 crore.
In its petition for the financial year 2016-17, the PDD has projected Annual Revenue Requirement at Rs 6384.34 crore and pegged Revenue assessed at existing tariff at Rs 2812.21 crore with Revenue gap to the tune of Rs 3572.14 crore. The tariff revision for FY 2016-17 has been proposed to bring down the gap to Rs 3065.62 crore by expecting additional revenue of Rs 506.52 crore.
By not extending cooperation to the SERC in finalization of tariff, the PDD is creating roadblock in generation of additional revenue of Rs 506.52 crore.
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