Andhra Pradesh to Review Only ‘Malafide’ PPAs: RK Singh

At the side-lines of the launch of the State Solar Rooftop Attractiveness Index (SARAL) in New Delhi, Power Minister RK Singh said that “he Andhra Pradesh government has clarified that they would not open all PPAs (power purchase agreements). It would be only cases, where there is manifest wrongdoing.”

A similar sentiment was expressed by the power minister and MNRE secretary at the curtain raiser of RE-Invest held a few weeks earlier too. MNRE Secretary Aanand Kumar had reassured saying the government was in the process of negotiations with the newly elected Andhra Pradesh government and had said that only if there was any ‘malafide’ involved, can any government (central or state) review the PPAs.

On July 1 and July 12, Andhra Pradesh government had issued orders to the state power companies. The first letter said the new Chief Minister of the state Jagan Mohan Reddy had set up a panel to negotiate lower electricity tariffs, while the second threatened to terminate contracts of developers who do not fall in line.

The whole episode was making renewable energy companies anxious about the attitude of the state. Foreseeing its effect, Singh wrote to Reddy strongly urging him against the renegotiation of PPAs. Later, Kumar too had cautioned the state against such a move.

The state government had asked wind and solar plants with a total capacity of 3,000 MW to back down and disconnected them from the grid to balance the oversupplied grid but officials say that rules required conventional plants to reduce supply.

A petition filed by the wind energy firms led the Andhra Pradesh High Court to order a stay against Andhra Pradesh government’s move to renegotiate tariffs of signed contracts. The court stopped the state’s move to cut tariffs until August 22, that is today, following the petitions filed by the Indian Wind Power Association and individual project developers.

Earlier this month, MNRE without taking, names issued a letter asking states to ensure that the “must-run” status of renewable energy plants is honoured and followed.

—With inputs from Saur Energy.