JERC Approves Revised Tariff for 2026-27; ₹2,420.78 Crore Government Subsidy to Bridge Revenue Gap
Srinagar, August 22: The Joint Electricity Regulatory Commission (JERC) for Jammu & Kashmir and Ladakh has approved an average 6.83% increase in electricity tariffs for Jammu and Kashmir for the financial year 2026-27.
The revised tariff will come into effect from September 1, 2026, with electricity consumption recorded from that date to be billed according to the new tariff structure.
The decision follows tariff proposals submitted by the Jammu Power Distribution Corporation Limited (JPDCL) and Kashmir Power Distribution Corporation Limited (KPDCL) to address their revenue requirements. The two distribution companies had proposed a 5% across-the-board tariff hike.
Revenue Requirement Assessed at ₹10,275.72 Crore
According to the JERC tariff order, a copy of which is with news agency KNC, the Commission, after carrying out a detailed prudence assessment, has determined the combined Annual Revenue Requirement (ARR) of JPDCL and KPDCL at ₹10,275.72 crore.
Against this requirement, the revenue projected under the existing tariff structure was assessed at ₹7,352.87 crore, leaving a revenue gap of ₹2,922.85 crore.
The Commission observed that recovering the entire revenue shortfall through an increase in electricity tariffs alone would have required a hike of nearly 40%, which could have placed a significant financial burden on consumers.
₹2,420.78 Crore Government Subsidy to Reduce Consumer Burden
To minimise the impact on consumers, the Commission has taken into account ₹2,420.78 crore in financial support committed by the Jammu and Kashmir Government as subsidy under Section 65 of the Electricity Act, 2003.
With the revised tariff, the projected revenue of JPDCL and KPDCL is expected to rise to ₹7,854.94 crore, while the remaining ₹2,420.78 crore revenue gap will be met through government grant-in-aid.
Revised Tariff Effective From September 1
The Commission has directed that the revised tariff structure shall remain applicable from September 1, 2026.
Accordingly, consumers will be billed at the revised electricity rates for power consumed from September 1 onwards.
The tariff order is aimed at balancing the financial requirements of the power distribution companies while limiting the immediate impact of the revenue shortfall on electricity consumers through government subsidy support. (KNC)
