“Money flow directly correlated with reforms under GOI guidelines” “Under LPS Rules, Govt must pay upfront to purchase power” “UT Government Facing Unsustainable Rs 31000 Cr Liability”
Jammu: H Rajesh Prasad, principal secretary of the Power Development Department (PDD), said on Thursday that smart metres were essential for purchasing electricity as well as receiving federal funding via the Revamped Distribution Sector Scheme (RDSS) and PMDP since “money flow was directly linked to reforms.”
According to the instructions set forward by the Government of India for all states and Union Territories to follow, he said that this was the clear trajectory being followed across the whole nation.
The UT government, according to Principal Secretary PDD, has a debt of Rs 31000 Cr as a result of a loan it received to purchase electricity. “This $31,000,000,000 obligation is completely unsupportable. Massive AT&C losses (55 percent) are to blame for everything, he said.
He made this statement at a news conference that was held to explain the rules for smart metres and assuage concerns about them.
He said, “As far as J&K consumption is concerned, we acquired 20,400 Million Electricity Units in the most recent financial year, which concluded in March 2023. We must remember that the new Electricity Late Payment Surcharge and Related Matters (LPS) Rules require the government to pay upfront for the purchase of electricity in accordance with the PPAs (Power Purchase Agreements) with Gencos, including central and J&K Gencos, or else power outages would occur.
In the event of a shortfall, we also purchase electricity at excessive prices, Prasad remarked. We anticipate a 10% rise in consumption this year compared to the previous financial year’s consumption (20,400 Million Units), which will be more than 22,000 Million Units.
He said that J&K saw the largest aggregate gearbox and commercial (AT&C) losses nationwide, at 50–55 percent.
“J&K is still in the pre-reform era (before the Electricity Act of 2003). Beyond LPS Rules, the money flow for infrastructure modernization to replace outdated infrastructure would only be available if AT&C losses are kept to a minimum following reforms launched by the Government of India in the sector of Transmission and Distribution to ensure re-bounce and capacity building. To achieve this, the Revamped Distribution Sector Scheme (RDSS) has set a clear course for all the states/UT, including J&K, to reduce AT&C losses by 10-15% annually. Only then will we start receiving funding from the Centre for infrastructure upgrades like grid stations, transmission towers, and transformers, according to Prasad.
The rates for agricultural are 80 paise, Rs. 1.25 for BPL categories, Rs. 2 for units beyond 400, and Rs. 4.50 for the highest charges in the residential or domestic sectors per unit, according to him. In comparison to other states, these rates are much lower.
“Similar to the industrial sector, we are pricing less in comparison. The fees for government offices are only larger in the case of public utilities, and they may reach Rs 7. Our rates are among the lowest overall in the nation, according to Principal Secretary PDD.
The region covered by KPDCL saw aggregate transmission and commercial (AT&C) losses of 58 percent in J&K, compared to 42 percent in Jammu, he said.
“So, on average, 55% of the electricity we buy (20,400 MW during the past Financial Year) results in losses. We barely have 50% consumer metres (combined) in the Kashmir and Jammu divisions, which is the cause of these losses. Even if the average metering is just 50%, it’s likely that certain regions have higher coverage than others. Consumers in the remaining locations without metres pay flat rates for consumption costs, and many do not pay anything at all, he added.
He cited additional factors, such as electricity theft and less effective invoicing and collection than in other states.
“The fact that we have placed 3.80 lakh smart metres is encouraging. Please remember that we must pay for electricity at the prices determined by the regulator. Consumers will be charged for the units they use. Government rates are set with consideration for the affordability of vulnerable groups, such as the BPL category and even the industrial sector, since the government is particularly attentive to the issues of the populace. I’ll say it again: We have some of the lowest rates in the nation. According to Prasad, the government must make up 55% of AT&C’s losses via budgetary assistance.
He said that due to significant AT&C losses, funds that might have been spent for social and economic development were instead being used to purchase electricity.
“Therefore, a deliberate choice has been made to install tested and calibrated smart metres. No chance of exaggerated bills exists. We are here to dispel any fears if there are any,” he added, noting that the UT government has a clear strategy for the next three years to reduce losses and provide a dependable electricity supply at reasonable prices.
“Smart metres are advantageous in a variety of ways. There will be varied prices for the same day, such as higher rates if you use the washing machine at busy times and reduced rates otherwise. This is going to occur in a year or two. The deadline is 2024, he added.
According to Prasad, J&K has seen significant investment in the generating, distribution, and transmission sectors after 2019. In the last three and a half years, our capacity in the transmission and distribution sector has expanded by 50%.