Power tariffs rise 6.83 per cent from September amid improving AT&C losses and revenue, but weak hydro generation and falling peripheral collections after metering complicate the sector’s recovery story, reports Masood Hussain
By September 1, 2026, power consumers in Jammu and Kashmir will pay more for the power as the tariffs were increased by 6.83 per cent.
Domestic consumers using up to 200 units a month will pay Rs 2.45 per unit, rising to Rs 4.60 per unit beyond 400 units, with BPL consumers retained at a lower Rs 1.40 per unit slab. Commercial and industrial tariffs rose by comparable or larger margins, and a peak hour surcharge of 20 per cent, offset by a 20 per cent solar hour rebate, now applies wherever smart metering supports it.
As expected, there was opposition to the hike. Some even took to the streets against Omar Abdullah, also the power minister of the erstwhile state.
The Federation of Chambers of Industries (FCIK), Kashmir’s main voice from the manufacturing sector, said the average hike figure understates the fact. It calculates the LT industrial energy charge rose 9.52 per cent, and the HT charge at 11 kV rose 9.76 per cent, both above the 6.83 per cent average. This happened, it pointed out, despite the power distributors, JPDCL and KPDCL, having only sought a 5 per cent increase in their application to the JERC. They are seeking a review.
Omar defended the hike as a compulsion. “We increased the rate of electricity by only 6 per cent, after four years. How many other prices increased during that time? How much did inflation increase? Where did the prices of oil reach? Where did the prices of the goods you buy from the market reach?” Omar asked. “Look, we are not celebrating by increasing the rate of electricity. This was our compulsion.”
The tariffs were supposed to go up as the energy markets are soaring. But the hike brought the power sector of a water-abundant and power-deficit territory into sharp focus once again. Everybody is asking: what is the state of power post-unbundling, and what do the energy futures look like?
Power Position
By the end of March 31, 2026, Jammu and Kashmir consumed 20,600 million units of electricity in 2025-26. Summer peak demand touched 3,000 MW against 3,200 MW available, a surplus of 200 MW. Winter demand rose to 3,325 MW against only 2,550 MW available, a deficit of around 800 MW. Peak demand is growing roughly 6 per cent a year. The winter deficit, and any shortfall in summer beyond contracted supply, is met through purchases on the Power Exchange and seasonal banking arrangements, both costlier than the utilities’ own generation and long-term power purchase agreements.
Jammu and Kashmir has 25,20,812 registered consumers, of which 85 per cent are domestic, 11 per cent are commercial, and one per cent are industrial. As far as consumption goes, 42 per cent of the electricity is consumed by domestic consumers, 11 per cent by commercial consumers and 18 per cent by industry. Agriculture forms one per cent of registered consumers but consumed 5 per cent of electricity in 2025-26.
Revenue Position
Revenue realised by JPDCL and KPDCL rose steadily over five years, from a combined Rs 3,060 crore in 2021-22 to a tentative Rs 5,290 crore in 2025-26, roughly doubling.
JPDCL, which ‘empowers’ Jammu, saw its revenue increasing from Rs 1697 crore in 2021-22 to Rs 2059 crore in 2022-23, Rs 2347 crore in 2023-24, Rs 2587 crore in 2024-25 and Rs 2724 crore in 2025-26.
The same trend was witnessed for KPDCL that distributes power to the Kashmir region. It was Rs 1363 crore in 2021-22, Rs 1546 crore in 2022-23, Rs 1883 crore in 2023-24, Rs 2312 crore in 2024-25 and Rs 2566 crore in 2025-26.
Jammu and Kashmir purchases most of the power it consumes. Unlike in the past when the gap between the power purchase cost and the tariffs collected was high, it has started narrowing down. Overall power purchase costs have been going up with every passing year: Rs 7847 crore in 2020-21, Rs 9008 crore in 2021-22, Rs 9886 crore in 2022-23, Rs 9500 crore in 2023-24, Rs 9050 crore in 2024-25 and Rs 9300 crore in 2025-26.
The resulting annual gap, before subsidy, narrowed from about Rs 6,250 crore in 2022-23 to around Rs 4,100 crore in 2025-26. With subsidy included, the shortfall fell further, from Rs 3,915 crore to roughly Rs 1,300 crore. Officials describe this as the backdrop against which the current tariff order and its Rs 2,420.78 crore subsidy allocations were framed by JERC, rather than a case of the sector reverting to worse performance.
Infra Upgrade
The power department has utilised various centrally funded schemes and improved the power transmission and distribution network over the years. The Revamped Distribution Sector Scheme (RDSS) has a combined Rs 5,762 crore sanctioned across both DISCOMs, split roughly evenly between smart metering works worth Rs 1,053 crore and loss reduction works worth Rs 4,709 crore. The loss reduction component covers aerial bunched cabling (ABC) of overhead low tension and high tension lines, underground cabling of high tension feeders, augmentation and replacement of distribution transformers including high voltage distribution system installation, and feeder segregation.
Across the two regions, roughly 30 packages have been awarded to four implementing agencies: JPDCL’s own project wing, KPDCL’s project wing, Power Grid Energy Services Limited and National Thermal Power Corporation, with physical progress ranging widely by circle, from as low as 20 per cent in newer Jammu packages like Udhampur to as high as 91 per cent in older ones like Vijaipur.
The scale of cabling involved is substantial but still partial. Jammu’s total low tension network runs to almost 82,000 km, of which just over 20,000 km will be aerial bunched cable once RDSS work concludes, leaving most of the network still on bare conductor. Kashmir’s low tension network of roughly 43,670 km will see about 13,169 km converted.
Officials have acknowledged this covers only about 25 per cent of the low tension network overall, and have proposed a further phase, an additional 20,080 km in Jammu and 15,922 km in Kashmir, at Rs 2,465 crore and Rs 2,950 crore respectively, to be funded outside RDSS through mechanisms such as SASCI capital expenditure support or additional grants sought from the Ministry of Power.
Besides, transmission capacity is also being expanded. Two grid stations in Jammu, at Rajouri and Akhnoor (Domana), worth a combined Rs 793 crore, and one in Kashmir at Wahipora worth Rs 178 crore, are proposed under SASCI, currently under retendering after high tariff bids in the first round. The Rajouri and Akhnoor projects are described as critical to drawing power from the upcoming 400 kV central grid station at Rajouri, while the Wahipora project is intended to relieve transmission constraints in north Kashmir.
Separately, battery energy storage systems are being proposed at select grid stations to shift low-cost daytime solar power into evening peak hours. Off-grid solar plus storage systems are proposed for remote areas like Gurez, Marwah and Warwan, which currently sit outside reliable grid supply altogether.
Smart prepaid meter installation stood at 9.80 lakh of a 14.90 lakh target as of June 2026, an overall completion rate of 66 per cent. KPDCL had installed 5.11 lakh of 7.27 lakh sanctioned meters, 70 per cent complete. JPDCL had installed 4.69 lakh of 7.63 lakh sanctioned meters, 62 per cent complete.
Around 4 lakh consumers are expected to remain uncovered once the current phase closes in October 2026. It is against this partial rollout that JERC has introduced time-of-day tariffs, applying them wherever compatible metering exists rather than waiting for full coverage.
Loss Reduction
The change in the infra-upgrade is already visible. Officials said the feeders with both smart metering and ABC are recording losses as low as 12 per cent, against over 60 per cent on unconverted feeders nearby.
AT&C losses across Jammu and Kashmir have fallen from 58 per cent in FY22 to an estimated 30 per cent in FY26, driven largely by RDSS. Billing efficiency has risen from 56 to 77 per cent over the same period, and collection efficiency from 75 to 94 per cent.
The gap between average cost of supply and average revenue realised narrowed from Rs 2.1 per unit in FY22 to Rs 0.28 per unit in FY26.
However, circle-wise figures show uneven progress: Jammu circle’s losses fell from 43 to 26 per cent, while Rajouri circle’s losses actually rose over the period, from 36 to 37 per cent, after fluctuating in between.
In Kashmir, 1st Srinagar circle improved from 58 to 28 per cent, while Ganderbal circle remained comparatively high at 46 per cent.
The scheme’s target is 16 per cent losses, the national average, by FY27. JERC’s own order sets a nearer-term target of 15 per cent for JPDCL and 19 per cent for KPDCL for the current control period.
The Flip Side
The sector, however, is facing an interesting situation on two counts.
One is climate change. The 2026 hydro season has been weak. State and central sector hydro generation in Jammu and Kashmir fell by close to 310 MW in May 2026 compared with May 2025. Officials attribute the decline to low river flows. Around 60 per cent of the power demand in Jammu and Kashmir is normally met through hydro sources, so the shortfall has pushed greater dependence on Power Exchange purchases, where peak hour prices have touched Rs 10 per unit, several times the cost of the utilities’ contracted supply. That imported power sits directly behind the revenue gap the tariff order is meant to address.
The other is loading, but may not be visible to the planners. In peripheral areas where metering has taken place, collections have fallen drastically compared with when consumers were paying under the flat-rate system. When it was a flat rate, reports from south Kashmir suggest, consumers would consume to the maximum. As meters were installed, they became disciplined, and villages now pay barely one-third of what they paid earlier. This is happening because they have returned to the traditional source for cooking and heating, retaining the lighting on electricity.
It is in this backdrop that the JERC has agreed to a hike.
