*Even after increase, revenue gap will remain at Rs 2100 cr
Mohinder Verma
JAMMU, Nov 12: The Jammu and Kashmir State Electricity Regulatory Commission (SERC) has approved average 10% increase in the power tariff for the current financial year for the common consumers on the ground of gradually reducing the Annual Cost of Supply of power and Annual Revenue Requirement gap. However, even after this tariff revision there would remain an unmet revenue gap of Rs 2,141.85 crore
Official sources told EXCELSIOR that it was due to non-cooperation from the senior functionaries of the Power Development Department that State Electricity Regulatory Commission could not finalize the tariff for the Financial Year 2016-17 on time.
The Commission was repeatedly asking for furnishing formal communication about making available subsidy of Rs 1,728.37 crore announced by the Government in the Power Budget speech for the current financial year. But, for several months the officers of the Power Development Department failed to ensure compliance to directive in this regard thereby creating road-block in finalization of the power tariff on time, sources said.
It was only after the concerned officers of the PDD furnished letter from the Director Finance in the supplementary petition mentioning that Government will provide the necessary support to the PDD to meet the revenue gap for 2016-17 that the Commission could move ahead for finalization of the tariff for the current financial year that too with the directions that the subsidies to be provided by the Government shall be regulated strictly in terms of the provisions of the Section 59 of the J&K Electricity Act read with JKSERC Distribution Tariff Regulations, 2012.
After completion of all the necessary formalities, the SERC approved the new tariff vide order dated October 7, 2016 with the direction to the PDD to take immediate steps for implementation and publication of order as per Regulation 51, Chapter-V of the JKSERC (Conduct of Business) Regulations, 2005. It was also explicitly stated in the order that the new tariff shall come into effect from October 1, 2016 and shall remain valid up to March 31, 2017.
However, for one and half month the PDD kept the public in dark about the new tariff for unknown reasons thereby flouting the Regulations. Though the department has now made public the tariff order but the department is silent about date of its applicability.
As per the SERC approved tariff order, average 10% hike has been approved for the domestic, non-domestic/commercial categories of the consumers while as for the State/Central Government departments hike of 9% has been approved. Similarly, for agriculture category hike of 10% has been approved. Likewise, for LT industrial supply hike of average 10% and for HT industrial supply average 9% hike has been approved by the Commission.
However, the Power Development Department had proposed 23% hike for the domestic category of consumers, 25% for the non-domestic/commercial and no hike for State/Central Government departments. For agriculture category, the PDD had proposed 14% hike and 14% and 15% respectively for LT and HT industrial supply.
Justifying the hike, the SERC said, “there has been no tariff hike in the State during FY 2014-15 and FY 2015-16. In fact, the State Government has reduced the electricity duty from 22% to 10% (12% reduction) which has given further relief to the consumers”, adding “in the present scenario, each and every category of the consumer in the State, Government as well as Non-Government, is availing substantial subsidy ranging from 7% to 60% vis-à-vis the average cost of supply of the utility for FY 2016-17”.
“In view of this, an increase in the tariff in the State was overdue so that it progressively matches the cost of supply in 4-5 years and to gradually reduce the ACS-ARR gap”, the Commission said, adding “while working towards achievement of the objective for considering the tariff hike during FY 2016-17, it has been ensured that no tariff shock is given to the common consumer and the interest of weaker section in particular is adequately protected”.
The Commissioner further said, “in case of other common consumers, the prudent loss figures at the national level have been the guiding principal for considering tariff revision so that the inefficiencies of the PDD such as high T&D loss are not passed on to the consumers”.
While average increase in tariff has been restricted to 10% or below in case of common consumers, the same has been revised appropriately to match the average cost of supply at the approved T&D loss levels in case of other category of consumers like Central/State Government departments, which don’t deserve subsidy.
Even after tariff revision for FY 2016-17 there would remain unmet revenue gap of Rs 2141.85 crore. Against the Aggregate Revenue Requirement of Rs 6384.33 crore proposed by the PDD, the Commission has approved Rs 5471.74 crore while as against Rs 3313.58 crore revenue realization at the rate of revised tariff proposed by the PDD, the SERC has approved Rs 3329.88 crore.
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