Shocker! After power cuts, comes proposal for 13.5% tariff hike

While sweltering heat and humid conditions have made life of the residents miserable and they daily battle with unscheduled power cuts, the government is working on burdening them with hike in power tariff.
The PDP-BJP coalition government is pressing for immediate approval for 13.5 per cent hike in electricity tariff from the State Electricity Regulatory Commission (SERC), proposal for which has been submitted by the Power Development Department (PDD).
Officials said as the gap between revenue and supply of power was increasing alarmingly burdening the state’s economy, the coalition government was making every effort to increase the revenue collection.
If the proposal is accepted, it will be a major hike in the past two years as the last increase was made in 2013-14 fiscal, when it was raised by 8.5 per cent. During 2011-12 the increase was 15 per cent and in 2012-13 19 per cent. The state has not increased any tariff for the last two years and the government claims that the average cost of supply has grown by about 7 per cent.
Though Finance Minister Haseeb Drabu during his Budget speech has said reasonable degree of tariff hike from time to time is required to meet the operating costs and to serve the economy, but the power crisis in the state and pitiable condition of people in Jammu during the summer months and people in Kashmir in winter months raise several questions over the proposed move.
“The PDD is not able to provide regular power and unscheduled cuts are there even in metered areas, then why should people pay higher tariff. The first step should be to tackle the illegal power users, which include some high-profile people, who are chronic defaulters,” said Mahesh Sharma, a retired teacher.
Despite repeated tariff increase by the government in the last five years, electricity crisis is still prevailing in the state, especially in two capital cities — Jammu and Srinagar. The situation in other towns is also not good as people in rural areas spend time without electricity for hours.
As per the data, the average cost of electricity supply in Jammu and Kashmir is Rs 7.72 per unit. The average sale per unit is Rs 3.64. At the approved tariff, the average gap comes to Rs 4.18 per unit. The government aims to bring down the Rs 4.18 “loss” per unit by raising the electricity cost.
“Increasing the electricity charges is not a solution and it will only burden the genuine consumers who pay their bills regularly. Only 40 per cent consumers pay the bill. Any hike would also affect the industrial sector,” said Annil Suri, president, Bari Brahmana Industrial Association.
This fact has even been admitted by the government itself which has accepted that the widening gap between the power purchase bill and the revenue realisation is due to low tariffs, high T&D losses, faulty meters, uncontrolled and unaccounted consumption of power beyond the agreed load by the consumers.
At present the Transmission and Distribution (T&D) loss in the state is 59 per cent. To deal with this issue, the PDD has planned for 100 per cent metering for reduction in commercial losses.