Jammu and Kashmir is spending Rs 18 crore per day on power purchase against the average daily returns of Rs 6 crore on this count.
To meet its power demand, J&K enters into “arrangements” with NHPC, NVVN, Punjab, Haryana, Chhattisgarh, Power Trading Corporation (PTC), NTPC, Vidhyut, Vyapar Nigam LTD, besides overdrawing from Northern Grid.
According to official figures, the estimated hydropower potential of J&K is 20,000 MW. Out of the identified potential, 1211 MW have been exploited in “state sector” and 2009 MW in “central sector”.
“As per the current power usage and low power production across J&K, we are importing power worth Rs 18 crore a day,” chief engineer, J&K Power Corporation Limited, Er Muhammad Yusuf Baba said.
He said that on an average the government spends Rs 6500 crore per annum on power purchase. “The returns are somewhere between Rs 2000 crore to Rs 2200 crore, which means that around Rs 4000 crore are paid by the government out of its own kitty leading to accumulation of liabilities,” he said.
Baba said that power purchase liability of J&K towards various CPUs ending June 2020 had swollen to Rs 11,500 crore on which late payment surcharge (interest rate) of 18% per annum was charged.
However, a loan assistance of Rs 11,024.47 crore has been approved for Jammu & Kashmir under the Atmanirbhar Bharat Abhiyan (liquidity infusion scheme in DISCOMs.) This will enable J&K to clear its outstanding payments under Power purchases made by it.
An MoU for availing of the second tranche of this loan for Rs 5444.47 crore was signed between JK Power Development Department, J&K Power Corporation Ltd. and Power Finance Corporation early this month.
According to Baba this loan assistance will enable savings of nearly Rs. 1000 crore to J&K on account of “difference in rate of interest (late payment surcharge) that was otherwise being charged by the creditors against these power purchase liabilities”.
It may be recalled that under the Atmanirbhar Bharat Abhiyan, the government of India had announced a special package of Rs 90,000 crore for liquidity infusion in DISCOMs for clearing of their power purchase liabilities to tide over financial crises owing to low power recoveries.