After hiking the power tariff by 139 per cent in the last five years, the PDD has proposed to raise tariffs by 13 to 35 per cent for different consumers angering the public. However, a local organization has challenged the proposal accusing the department of passing its failures on to the consumers. Tasavur Mushtaq reports.

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A flock of birds on a low-tension power distribution line. KL Image: Bilal Bahadur

In less than six months, the Jammu and Kashmir Power Development Department (PDD) has proposed another hike in power tariff, annoying people in general and industrialists in particular. The PDD has petitioned the Jammu and Kashmir State Electricity Regulatory Commission (JKSERC) seeking approval of the Annual Revenue Requirement (ARR) and a revision in power tariff for the financial year (FY) 2012-13. In response, a counter-petition was filed by the Kashmir Centre for Social and Development Studies (KCSDS) seeking its dismissal.

Under section 71 of the Jammu and Kashmir Electricity Act, JKSERC has been empowered to determine the electricity tariffs.

The department in its petition mentioned that there is a revenue gap of Rs 2411.12 crore for the FY 2012-13, and an increase in tariff will reduce the revenue gap by Rs 312.81 crore. For the rest of Rs 2098.31 crore, the department banks with the help of the state government.

The PDD proposes that JKSERC to hike the power tariff by 23 per cent in case of metered domestic consumers who are believed to be around 1021433 in number, leading to the proposed revenue of 243.03 crore. Unmetered areas have to bear a proposed hike of 35 per cent. The PDD will realise additional revenue of Rs 50.43 crores from 119908 consumers falling in this category.

In metered commercial category where the consumer base is estimated to be around 124176, a proposed hike of 21 per cent would fetch the department Rs 120.91 crore while around 26004 unmetered commercial establishments will be charged 31 per cent more fetching the department Rs 19.16 crore.

The metered agriculture category having 14085 consumers will have a proposed revenue of 28.84 crore at a proposed hike of 10 per cent. Unmetered will be charged 22 per cent more, enhancing the revenue by Rs 0.48 crore from 1813 consumers.

The main consumers of electricity the state and central government departments where the consumer base is 9674 will be charged 13 per cent more in metered and thus proposed revenue will be 897.40 crore. Unmetered in this case will remain unchanged.

The proposed tariff will get the department a gross revenue of Rs 2112.37 crore. The proposed collection efficiency is calculated to be 95 per cent and net revenue at the proposed tariff is to be Rs 2006.7crore. The hike will add a total of Rs 312.81 crore to the PDD’s revenue.

With hike in tariff, the connected load too is projected to increase. For domestic from 619.18 MW, the load will increase to 640.3 MW. In case of commercial the load will increase to 206.95 MW from 185.31 MW. The agricultural category will witness increase from 149.33 MW to 153.79 MW. From 156.11 MW to 159.78 MW there is jump in the connected load of state/central government departments.

The average hike proposed for unmetered consumers is more as compared to average hike proposed for metered consumers in same category.

The proposal has been opposed by KCSDS through an objection by its chairperson Professor Hameedah Nayeem. It also sought a reversal of the hike approved by JKSERC in October 2011.

In its objection, KCSDS pleaded that, “JKSERC, from the year 2007-08 to 2011-12, has already allowed an unprecedented hike of 139% in the power tariff without having regard for the economic conditions of people crushed by turbulence. The tariff increased from the average value of Rs1.40 per unit in the year 2006-07 (before SERC issued first tariff order for 2007-08) to Rs. 3.35 per unit in 2011-12 with 17% hike allowed only last October. Any new hike allowed after mere 5 months will further cripple the people and has the potential of (evincing) public outrage.”

Taking dig at the operational efficiency of PDD, the social body claimed that the department has miserably failed in showing regard to the directives of the commission issued in order to improve the operational efficiency of the utility.

“As against the target of complete metering by March 2012, the utility is still at around 50% of the job only,” reads the report.

The PDD is accused of failing to implement the directives of JKSERC in establishing the meter testing lab in Srinagar and Jammu.

“The meters are being installed without meter board, MCCB/Cut Out, earthling terminal and bearer wire as per standards. The PDD is required to be directed to follow standard practice as being followed in RGGVY works,” they pleaded.

The civil society group alleged that the PDD had failed to check the menace of theft and misuse of electricity even in the metered areas much to the inconvenience of honest consumers.

The KCDSC termed the mechanism of power purchase as flawed citing the reason that the wing is not fully augmented with technical staff including a finance division.

“Since power purchase cost is huge around Rs3000crore, this wing needs to be fully augmented with technical staff including a finance wing,” says the report.

The failure of PDD to keep bulbs glowing in winter, the KCSDS in its filed objection mentioned that the department is losing money by running gas turbines instead of purchasing power from the open market through power trading companies. The per unit cost of the gas turbine is Rs 17 to Rs 20 and in the open market is only Rs 5.

On Transmission and Distribution losses of 62 per cent shown as incurred by the utility, the KCSDS pleaded that the figure was incorrect. “In fact, these losses happen to be 74 per cent as the utility realizes revenue only for 26 per cent out of the bills issued for 38 per cent of total power pumped in the system probably to show the targets fixed by the regulator from time to time have been attained. One can understand the logic in little default in payments by the general public but how could there be a whopping cumulative outstanding of 750 crore with government departments,” it said.

Giving statistics of allotting funds and using them, KCSDS stressed upon the need to take the valley on a priority basis, “(Kashmir) valley should have received maximum attention and funds, especially under RGGVY which is focused on electrifying un-electrified and de-electrified villages and intensive village electrification of already electrified villages,” says the report. The scheme cost for Kashmir has been 163.65 crore, while for Jammu it is being kept at Rs 238.34 crore. Together for Leh and Kargil, it is 442.20 crore.

On staff problem, the petition of KCSDSS reads: “The PDD is always making a pretext of understaffing in the way of reforms. In fact, PDD has an employee base of 31000 which includes around 13000 daily rated workers /casual labourers as well. If we add to this around 5000 employees of PDC as well, the total employee base works out to 36000. PDD has a consumer base of around 12.8 lakh consumers and energy sold to consumers is around 4500 Million Units. The employees per 1000 consumers therefore works out to 28 against an India average of around nine and the employees per MU sold works out to eight against an India average of three. Therefore PDD is overstaffed 3 fold if we go by national standards.” The KCSDS complained that available energy with the utility continues to be distributed inequitably. “The directions passed by the Commission on 2nd of January, 2012 in response to our petition filed against discriminatory power curtailment schedule have not been complied with by the utility.

“In contrast to the orders passed by SERC, the PDD has failed to issue a fresh curtailment schedule based on the equitable and non-discriminatory distribution of energy amongst the consumers of the state. Whereas all metered areas in Jammu region reportedly get uninterrupted power supply, the same areas in the valley are subjected to daily cuts including a weekly 4-hour evening cut between 6 pm – 10.0 pm despite the commission’s directions against such discrimination,” it added.

The KCSDS has also requested the Commission that in reprimand to non-compliance of orders, the hike allowed in October last year be also reversed till the department implements reforms as directed by the Commission.

Terming the hike as the core issue, they in their objection say, this is necessary to “stabilize public faith” and confidence in the Commission.

Reacting to the hike the industrialists accused the department of trying to pass its failures to the consumers.

“So far from 2007-08, we have had 139 per cent of the hike, without having any regard for the crippling economy. Losses are around 74 per cent and they have failed to check it,” says Shakeel Qalander, noted industrialist and former president of FCIK. “By saving one per cent of loss, there is 30 crore revenue savings”.

“Outstanding accumulated over a period of years is 1100 crore, out of which 750 crore are against the government departments including the paramilitary forces,” he added.

Former president KCCI, Dr Mubeen Shah reacting to the proposal said, “There is no justification for hiking tariff. However, if PDD decides to go ahead, people will have no option but to come on the roads.”

The Development Commissioner Power, Manzoor Ahmad Salroo said they have only highlighted the problems faced by the department in its petition before the Commission.

“We have pleaded for the recommendation from the Commission to these problems,” Salroo said. “But the society has a role to come forward to help us bring improvement in the sector.”

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