Government unable to recover cost of electricity from Baglihar II

Government unable to recover cost of electricity from Baglihar II

SRINAGAR: The Jammu and Kashmir State Power Development Corporation (JKSPDC), a fully-owned government company, is facing a tough time in getting buyers for electricity produced in its 450-MW Baglihar II power project. The rate of its power unit is much higher than the available market rate in India, Kashmir Reader has learnt.
One of the top officials of JKSPDC, wishing anonymity, told Reader that the power project has been getting rates not more than Rs 3.5 from buyers while its production cost, which includes taxes and water charges, is more than Rs 4 per unit.
The official said that amid the ongoing slump in markets, the company is selling the project’s entire power to the Power Development Department (PDD) since September 2015 at Rs 3.6 per unit. He said that although the power plant is set to sell electricity in the open market from March this year as per the agreement, the company has failed to lure any buyer.
“As of now, we sell the entire power to PDD, but the company cannot afford to continue it. As per the agreement, we are ready to give 40 percent of the generation to PDD, but for the 60 percent we have to find buyers in the open market,” he said.
“Although selling the entire power to PDD seems good, but there are issues involved. PDD cannot pay us at a time because it does not generate revenue in one go. In such circumstances, it suits us to sell electricity to another buyer. But if we cannot get the rate as per our requirement, we have to sell it anyway and bear the losses. There is no alternative,” the top official said.
The 450-MW Baglihar II is one of the main assets of the company that is the second largest producer of energy in the Valley after National Hydroelectric Power Corporation (NHPC). The state-run company that is set to become the second listed company from the state also produces revenue from other small projects and the 450-MW Baglihar I.
Director of JKPDC Shah Faesal told Kashmir Reader that the company is handling the issue with dexterity.
“It is not a very serious issue because there is a slump in the market right now. I am aware that rates are going down but hydropower has one advantage over other sources of energy, which is that it gives quality power during peak demand,” Faesal said.
Asked how the company will tackle the slump if it continues, Faesal said that the company will be exempted from many taxes and water charges. “If this is done, I am sure the cost of power will come down and we will have effective buyers,” he said.

2 Responses to "Government unable to recover cost of electricity from Baglihar II"

  1. Pingback: DRP News Bulletin 13 Feb 2017 (Oroville Dam Disasters, USA: A Wake Call To India A Country Of Aging Dams) | SANDRP

  2. SKChadha   February 8, 2017 at 12:02 pm

    Owning a business and running a business are two different aspects. The jokers in J&K desire to own every business but are unable to run it? They fail to understand that by giving tax concessions to Baglihar Project they are reducing State Revenue and paying Income-tax on profit of the project to Central Government ….. 😀

    In a similar way, in the name of autonomy the jokers have swallowed a lot which now they are unable to chew. The Mulla Dance of valley and Ponga Pandit Dance in Jammu is taking its toll .. 😀 😀