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JK lacks institutional mechanism for power purchase

Srinagar, Mar 11 2012, Believe it! Jammu and Kashmir has no institutionalized mechanism to monitor power purchases in the state.
 According to experts, the state incurs an annual expenditure of around Rs 3500 crore on procurement of power for its onward distribution to domestic, commercial, industrial and departmental consumers.
 While 80 percent of the power is being purchased from Central Public Sector Undertakings (CPUs) and other sources from outside the state, 20 percent requirement is met from the state-owned Power Development Corporation (PDC) and diesel generating stations mostly installed in Ladakh region.
 The Kashmir Centre for Social and Development Studies (KCSDS) in its objections to PDD tariff petition filed before State Electricity Regulatory Commission (SERC) recently, has made startling revelation of “grave lapses in the power purchases in the state which have been left to be handled by one Executive Engineer without any administrative control or technical support.”
 “There is neither any mechanism of cross-verification of the energy accounts by the department who receive energy in grids from JKSPDC and CPSUs like NHPC, NTPC, NPCIL and others nor any mechanism of joint meter reading by PDD and PDC in PDC owned stations,” KCSDS chairperson Prof Hameedah Nayeem states in her petition to SERC.
 According to experts, the Commercial and Survey wing of PDD deals with the purchase of power from various agencies before its onward transmission and distribution to the consumers.
 According to the petition, the Commercial and Survey wing is managed by one Chief Engineer, one Superintending Engineer, two Commercial Divisions, two Survey Divisions and two Load Dispatch and Meter Testing Divisions (LDM&T).
 “The Chief Engineer moves from one region to other with Durbar move while the Superintending Engineer is permanently stationed at Srinagar,” the petition said.
 It said: “Among the two commercial divisions, one each is permanently stationed at Srinagar and Jammu. While the Commercial Divisions deal with power purchase bills, SERC petitions, protection and meter testing; the Survey Divisions conduct load survey of consumers that forms basic data for power management and infrastructure planning. The LDM&T division deals with the load management and State Load Dispatch Centers.”
 The KCSDS explained to the SERC that the Commercial and Survey wing is considered to be a “Cell” implying unattractive, for the engineers.
 “It has been observed that engineers and officials put in all efforts to escape from being posted to C&S wing and it is only during last one year that three officers of the levels of Chief Engineer, Superintending Engineer and Executive Engineer managed transfer to ‘working wings’ within months of their posting,” it said.  
 “Since majority of engineers prefer posting to ‘working wings’, the C&S wing is presently without a full time chief engineer and the post is additionally held by the Development Commissioner Power who happens to be overloaded with lot of works as head of the utility,” they said.
 Although 10% of the total state budget is spent on purchase of power, yet the department continues to adopt non serious approach and obsolete methodology that has failed to check and reduce ever growing power bills, it said.
 Whereas the utilities in other states have since adopted latest techniques and mechanism to purchase power from open market through power trading companies, PDD in the state still prefers to generate costliest power through gas turbines, the KCSDS spokesman had told SERC.
 Prof. Hameedah Nayeem also conveyed her dismay on the role of SERC in the regulation of Power Purchases and approval to power procurement plan as the utility has never followed their directives except in case of tariff hike.  
 Talking to Greater Kashmir, Social Activist and former FCIK president Shakeel Qalander said there is an urgent need for the government to look into the whole issue of power purchase mechanism of PDD.
 He suggested that the government should immediately revamp the Commercial and Survey wing after clearing it from unwilling lot of engineers/officers and recruit efficient “Power Purchase Managers” and other supporting staff with separate legal and finance divisions in scientific and corporate environment.
 The staff in the wing could be created from amongst the upright and dedicated lot of engineers/officers within the department besides new recruits who could be offered attractive pay packages matching the best in the industry.
 He said that under Electricity Act 2003, the purchase of power has been allowed to be made from open market on competitive basis through Energy Exchanges and for past 5 years, the Power Purchase Managers and Power Traders throughout the country operate in the same way as Stock Exchange Brokers trade in shares. These managers remain constantly in touch on internet to keep watch on system frequency, present market rate of energy, surplus energy in the system, shortfall in the system, regional demand, regional load, congestions of corridor, weather forecast, machine break downs etc.
 The new “Power Purchase Managers" can also develop perspective power plans, supply demand scenario for decades to come besides keeping watch on present and future power scenario not only at state level but also at national level, Qalander said adding that they will also keep watch on the power purchase agreements being signed between the utilities which have impact on future power scenario.
 Qalander said that unless the government and PDD wake up to the reforms in the power purchase and load management mechanism, besides curbing the AT&C losses, the huge power purchase cost is going to continue and eat up the vitals of the  state economy.