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J&K can’t fulfil electricity demand even after buying 70% of JKSPDC power

Last Updated on January 7, 2021 at 7:35 pm

Even when Jammu and Kashmir buy more than 70 per cent of the total energy produced by Jammu and Kashmir State Power Development Corporation (JKSPDC) still the UT can’t fulfil demands of people within the region. Past regimes of the erstwhile state didn’t take up seriously power scarcity and the gap between demand and supply never ceased to exist.

electricity in jammu

Jammu and Kashmir State Power Development Corporation (JKSPDC) sells most of the power it generates (ranging from 64 per cent to 77 per cent) to erstwhile state Government. Still, it could meet only 18 per cent to 25 per cent of the power requirement of the region.

JKSPDC sells its entire production of power from its power plants other than the 450 MW Baglihar-I plant to the administration. JKSPDC sells a part of electricity produced through Baglihar-I power plant to other State utilities through the Power Trading Corporation (PTC). Power Purchase Agreements (PPA) manages the sale of power by JKSPDC with its buyers.

This arrangement is done in order to meet the debt servicing obligations on loans issued for construction of projects and to cover Operation and Maintenance expenditure. Rate on which power is sold through PTC is higher Rs 3.60 (short term PPA) and Rs 3.65 (long term PPA) per unit than those obtained on sale to JKPDD (Rs 1.85 to Rs 2.25 per unit). The government invests in Public Sector Undertakings to get sufficient returns on them.

The government invested Rs 2,883.13 crore in the power sector PSUs. This total amount consisted of Rs 1,056.64 crore as equity and Rs 1,826.49 crore as long term loans. Govt of J&K invested equity share capital of Rs 5.20 crore only in five 20 power sector PSUs. JKSPDC is the only active power PSU which has Government investment. It was a profitable company, with profits ranging from Rs 433.41 crore to Rs 668.95 crore during the last five years.

The total investment in these non-power PSUs was Rs 4,219.64 crore. This total investment was made by the government and some others. It consisted of equity of Rs 590.33 crore and long-term loans of Rs 3,629.31 crore. Government of J&K invested Rs 2,189.11 crore in 26 PSUs and of which, 21 consisted of equity of Rs 496.92 crore and long term loans of Rs1,692.19 crore.