Jammu and Kashmir government today said it is working out modalities to enable the return of NHPC-run power projects of the state, but did not give any time-frame for the same.
"It (return of power projects) is on the Agenda of Alliance. I have had extensive discussions with people in Delhi. Modalities are being worked out," state Finance Minister Haseeb Drabu told reporters here after presenting the state budget for 2016-17 in the state legislature.
The Minister said state government has worked out a few modalities with NHPC, but refrained from providing a time-frame for the return of the power projects.
"We have worked out three to four modalities and we will see which one suits (the state) best. I cannot provide the exact date as to when the power projects will be returned to the state as the modalities are being worked out," he said.
Asked about Union Power Minister Piyush Goyal s statement that the NHPC-run power projects cannot be returned to the state, Drabu said it was Goyal's view.
He (Goyal) has a view and this is not for the first time that objections have been raised.
"He is a good friend of mine (but) he does not own NHPC. I can assure you that extensive discussions have happened," the Finance Minister said.
Earlier, the Finance Minister presented a separate Power Budget in the assembly saying budget deficit of Rs 2,988 crore of the state was only on account of deficit in the power sector which was to the tune of over Rs 3,900 crore.
"We have an unfunded gap of Rs 2,988 crore. The power deficit in financial terms is Rs 3927 crore. In other words, if the power sector financials are taken care of, the State will not have a budgetary gap.
Indeed, it will be a surplus.
"Even worse is that despite incurring such losses, we are not able to provide adequate quantity and appropriate quality of power to our people," Drabu said.
The finance minister also announced a sop for families living below poverty line (BPL) saying the metered households from this section of the society will be given 30 units free per month and exempt from paying the fixed charges as well.
The minister said while the average per unit cost of electricity supplied to consumers is Rs 7.72, the average sale per unit is Rs 3.64.
At the approved tariff, the average gap or loss comes to Rs 4.18 per unit, or 54 per cent of the cost price per unit comprises of operational inefficiencies and a component of implicit subsidy which is neither directed nor targeted, Drabu said, adding the government would take some measures to reduce the gap by around Rs 2.
Drabu said the reasons for this large and widening gap
between power purchase bill and the revenue realisation include low tariffs, high T-D losses, faulty meters, un-controlled and un-accounted consumption of power beyond the permitted load by the consumers.
Unregistered connections, non-realisation of revenue from non-camp temporary installations of Security Forces, migrant camps, public lighting by the Municipal Corporations/Committees and Government offices are also contributing to the revenue loss.
The minister said reasonable degree of tariff hike from time to time is required to meet the operating costs and to serve the economy with reliable power.
The last tariff hike in the state was in FY 2013-14 when it was raised by 8.5 per cent.
The state government has not increased any tariff for the last two years, while the average cost of supply has grown by about seven per cent, he said.
Drabu said the government is taking steps to move towards tariff rationalisation, identify the barriers in moving towards tariff rationalisation and suitable ways to achieve tariff rationalisation.
Key measures in achieving these would be by introducing efficient tariff design, by including Time of Day rate structure , by administrative interventions, system improvement and consumer metering and by considering measures to reduce reactive energy, he said.
He said for Financial Year 2016-17, tariff petition has already been filed with State Electricity Regulatory Authority envisaging the proposals on above lines.
Without passing inefficiencies of the system to any category of consumer in the State, the Power Development Department (JKPDD) in its tariff petition before State Electricity Regularity Commission (SERC) has proposed to recover the prudent cost of supply from various categories of consumers by bringing the high-end categories like State/Central Government Departments, Public Street Lighting, Public Water Works at par with the prudent cost of supply.
The corresponding budgetary provisions shall be provided to respective departments, he said.
The minister said another proposal to recover the prudent cost of supply from the consumer categories like Domestic, Non-Domestic Agriculture and Industrial would be by giving a reasonable tariff hike.
By giving a reasonable tariff hike to the consumer categories like Domestic, Non-Domestic Agriculture and Industrial without any tariff shock to these categories.
The remaining cost up to the prudent level is proposed be claimed as direct subsidy from the concerned department for the respective categories, he said.
Drabu said in order to ensure transparent accounting, bring efficiencies in the system and to appropriately target subsidies to various categories of consumers, covering the gap between the prudent cost of supply and the tariff proposed for various categories of consumers who are presently below the prudent level, the Government proposes to build in and provide direct subsidy to the consumer through the JKPDD.
