The Andhra Pradesh High Court on Tuesday directed power generating firms — who are presently embroiled in a legal battle over the state government's decision to renegotiate power purchase agreements (PPAs) — to approach the state's Regulatory Commission to raise their objections, and directed the latter to resolve the issue in six months.
While this was a blow to the power companies, in a parallel move, the court struck down a government order, which had appointed a three-member expert committee to renegotiate the deals.
"The High Court has agreed to the argument of the government of the interim payment at Rs 2.43 to Rs 2.44 per unit. The High Court said that the government can issue notices as per law to power companies and stop power generation and directed the government to take back the generated electricity from the power companies," the Chief Minister's Office said in a press note.
PPAs are agreements made between a company that generates electricity and a power purchaser. In effect, the government is seeking to withdraw 21 PPAs with renewable energy companies.
The YSRCP government under Jagan Mohan Reddy has claimed that the DISCOMs (power distribution companies) in the state were going through a financial crisis and one of the main reasons for this was the higher tariffs in the wind and solar PPAs.
Earlier this month, Union Minister for Power and New & Renewable Energy RK Singh called the review decision ‘unfortunate,’ expressing fear that the move would affect foreign investments in the renewable energy sector.
Singh had earlier written to the state government requesting not to cancel the agreements, but Jagan remained defiant, saying, “We have inherited a bankrupt exchequer with a huge deficit of Rs 2.62 lakh crore, the DISCOMs’ unpaid generator dues of Rs 20,000 crore and accumulated losses of DISCOMs of Rs 15,000 crore.”
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