SAC approves restructuring, unbundling of PDD, operationalisation of Tradeco

SAC approves restructuring, unbundling of PDD, operationalisation of Tradeco

Even though the successor companies have already been incorporated, the operationalisation of these companies could not take place due to various reasons.

The State Administrative Council (SAC) approved operationalisation of the Jammu and Kashmir State Power Trading Company Limited (Tradeco) and issuance of SRO notification regarding PDD Transfer Scheme (Phase-I) Rules, 2018.

The Central Electricity Act of 2003, applicable to whole of India (except J&K) mandated promotion of competition and efficiency in the power sector by operating it as a prudent commercial enterprise. One of the key steps towards this goal was “unbundling” of the generation, transmission and distribution undertakings in the States into separate corporate entities and running these on sound business lines, a government spokesman said.

The J&K Electricity Act, 2010, was enacted to provide a frame work similar to the Central Electricity Act of 2003. Consequently, J&K SPDC was approved as a Nodal Agency to act on behalf of the Government of J&K for the unbundling exercise to be completed in 2012 itself.

In 2012, Cabinet accorded sanction to the unbundling of the Power Development department into four successor companies i.e (i) Jammu & Kashmir State Power Transmission Company Limited (Transco), (ii) Jammu and Kashmir State Power Trading Company Limited (Tradeco), (iii) Jammu Power Distribution Company Limited (Jammu Discom), and (iv) Kashmir Power Distribution Company Limited (Kashmir Discom).

Even though the successor companies have already been incorporated, the operationalisation of these companies could not take place due to various reasons.

The operationalization of Tradeco is proposed to be completed in two phases. The first phase is planned to be implemented immediately and would involve Tradeco carrying out functions/responsibilities related to power trading like purchase entire power requirement for JKPDD and perform activity of bulk supply of power, trading of surplus power, etc. The second phase will be initiated once other successor companies (Transco, Jammu Discom and Kashmir Discom) become operational.

For making the Tradeco functional, activities like winding up of the Commercial & Survey Wing of PDD, creation of office space for Tradeco, staff transfer, etc., will be undertaken.

This initiative by the PDD is a first step towards unbundling of PDD and setting a roadmap for clearing the liabilities on account of outstanding power purchase bills. It will also reduce the cost of purchasing power by bringing in efficiency and taking advantage of discounts.