Jagmohan Sharma
If I am asked to rate the infrastructure that impacts the lives of “we the people” the most in pecking order, I will place the power sector at number one. The others viz water, health services, financial services and banks, education, telecommunications, data centres, roads, road or sea transport, aviation and everything else are subservient to it. If the electricity is erratic or not available and of “substandard quality” the human life automatically turns miserable as all other services/sectors are dependent on electricity.
If a nation has 24×7 quality power at a reasonable price its efficiency is multiplied several times. This is the reality of life today.
However, electricity is a very highly misunderstood commodity, especially in J&K. It has somehow been etched into our collective consciousness since the decades that since we have rivers that can generate hydro power therefore, we are somehow at an advantageous position as compared to the other states/UTs of the country. We also believe that we have a birthright to free power as the rivers are ours. One of the tall leaders of J&K, who had a huge influence on the mind and soul of the people, once declared in an equally huge religious gathering that if the electricity department people come to you for collection of electricity fee their “legs should be broken.” This was in consequence to “complaint” by citizens that they were being asked to pay for electricity. So that is the legacy!
That said, we need to realise that while we’ve been able to harness only 3,500 MW (UT, IPP and central sector) of power from our rivers in past 77 years, the nation has an installed capacity of around 4,46,000 MW already. I am putting this data in figures so that the reality of installed capacity in J&K and the rest of the country sinks in the collective consciousness of the electricity consumers of J&K. The perception generated in J&K, over the decades, that the rest of the country is dependent on our water resources and our electricity for its power needs is essentially flawed. Yes, we have great rivers, but they have a limited potential. From our childhood we were told that our rivers have a potential of generating 20,000 MW of electricity, but the fact remains that we have been able to harness only 3,500 MW other 3,000 MW are in the offing in next few years from the power houses under construction on the Chenab basin. It needs to be emphasized that what is mentioned is the installed capacity of the power houses and not generation throughout the year. During the winter months the power houses are able to generate only 1/3rd of the capacity because of reduced water discharge in the rivers.
(A comparison with J&K’s installed capacity of 3,500 MW (installed over 75 years) with the installed capacity of solar power segment of power generation in last 10 years would be in order. In last 10 years the installed capacity of solar power in the country, which is a late entrant into the field of generation has now reached a figure of 83,000 MW).
Thus we are dependent on rest of the country to meet our power/energy needs.
It goes without saying that the installation of power houses, their running and operation has a cost and the power houses sell power to the State/UT/private power utilities through transmission & distribution networks who in turn sell it to power consumers. Just like any other commodity consumed by the consumers is to be paid for by them, so is the case with electricity which is essentially a commodity. The distribution companies of J&K buy power from our own sister concern viz Jammu & Kashmir Power Development Corporation, the generating company that operates Bhagliar, Lower Jehlum and other projects as also from the regional/national grid based upon the requirement of power in J&K, through JKPCL.
The rates of the electricity are fixed by the State/UT regulatory commissions, though the Governments have a say in settling the tariff for the people falling below the poverty line by way of providing subsidies in this regard. The Indian Electricity Act, 2003 specifies that the subsidies announced by the Govt must be made part of their budget and must be paid to the distribution companies so that these companies don’t get bankrupt and thus are rendered incapable of serving the communities where they are supplying power. This is only a rule!
However, the situation becomes alarming if the politics dictates that certain units of electricity are to be made free for the entire population without “calculating” the consequences.
Let’s come to the nitty-gritty of J&K
J&K has around 20,00,000 consumers; roughly 10 lakh with JPDCL & an equal number with KPDCL. JPDCL & KPDCL are the distribution companies. The average rate at which J&K buys electricity from the generators is around Rs. 5 per unit. This is the average cost as the market price of electricity varies from time to time and the last year electricity was purchased at Rs.20 per unit too.
Now if 200 units are made free for all the consumers than the total cost to the Government comes to around Rs. 200 cr per month i.e Rs. 2400 cr per year.
If the free units for the consumers is increased to 500, then the cost to be borne by the J&K Government works out to around Rs. 500 cr per month i.e. Rs. 6000 cr per year.
Total cost at which electricity was purchased by J&K Government to cater to the demand of the consumers for the FY 2023/24 was around Rs. 9500 cr. This is the raw cost and does not include the salary of employees, other administrative expenses and the O&M cost of the power network. This inclusive cost could be something like Rs. 12 to 13 thousand crores.
To make things clearer we must understand that the total revenue collected by both the discoms for the FY 2023/24 was Rs. 4200 cr. JPDCL contributed Rs. 2,350 cr while KPDCL contributed Rs. 1850 cr. However, the Aggregate Technical and Commercial (AT&C) losses still stood at more than 55 percent.
The other issue with the power sector is that once “freebees” are introduced the consumers instinctively become carefree about electricity consumption. If you add the “theft” component to it you have a heady cocktail ready.
This results in power system creaking & giving way in smaller consumer areas or the larger ones or may result in total collapse depending upon the electricity dynamics of the system in real time. Power system by its nature is such that the weakest link has the potential of sometimes bringing down the whole system. “Freebies” contribute to overloading of the system for the network is built on some engineering (loading) assumptions/principles and not for sudden increase in load. One of the factors used for designing a power network is the agreemented load with the power utility by the consumer, but if load side management is given a goodbye through the process of freebies, then freefall of power network is imminent! This also results in deterioration of quality of power viz low or fluctuating voltages etc.
The data mentioned above is a food for thought for all the stakeholders in J&K especially as we are not a revenue rich entity. One indicator of our revenue collection is the GST for 2023/24, which stood at Rs.660 cr.
Therefore, a considered and well thought over decision needs to be taken by all the stakeholders regarding the power sector in J&K. Since 2019, when the PDD was unbundled, there has been a capacity addition of around 75 – 100 percent in some of the essential components of the power network. The system is still fragile and will take quite some time to stabilize, though the situation is certainly looking up. Overburdening it at this stage will take the air out of its wings. It will be akin to filling a 20 kg bag of rice with 30 kgs of the grain and still expecting that it will not tear off at the seams.
Finally, a food for thought: if we are buying power for Rs. 9500 cr and collecting revenue of only Rs.4200 cr, we are already supplying power to the tune of Rs.5,300 cr free of cost!! The consequences of this anomaly are right in front of the residents of J&K!
The solution for J&K lies in solar power and that too in the PM’s Surya Ghar Bijli Yojna.
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