Andhra Pradesh HC stays state government’s move to renegotiate PPAs

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Updated: July 26, 2019 7:11:04 AM

Renewable power producers had moved the high court challenging the government’s attempt to renegotiate PPAs and revise tariff.

Andhra Pradesh HC, Electricity Act, tariff for renewable power producers, APERC, discoms, Electricity ActThe state government said it would now move the Andhra Pradesh Electricity Regulatory Commission (APERC) on power purchase agreements (PPAs) and tariff revision.

The Andhra Pradesh High Court has stayed the state government’s attempt to renegotiate tariff for renewable power producers, saying that negotiating procedure is outside the jurisdiction of the government under the Electricity Act and there should be no haste in these matters. The state government said it would now move the Andhra Pradesh Electricity Regulatory Commission (APERC) on power purchase agreements (PPAs) and tariff revision.

Renewable power producers had moved the high court challenging the government’s attempt to renegotiate PPAs and revise tariff. The government defended its plan to cancel PPAs, saying it was within its power to take such a decision and the negotiation committee set up by it was only to find if a consensus could be arrived at.

Also read: India’s R&D spend far less than China, Korea, as private companies, states abstain

“The show-cause notice issued by discoms threatening cancellation if they don’t agree for negotiation is only to mean as seeking revision of the PPA terms in accordance with the procedure under the Electricity Act,” the government said, adding that there was no threat or coercion on the issue.

After the hearing, a statement issued by the AP government said, “The distribution companies (discoms) will not unilaterally cancel the PPAs but will approach the APERC in this regard, the state has contended, to which the petitioners have also agreed.’’

The state government’s plan to reopen PPAs signed under the previous TDP government could bring 5.2 GW solar and wind energy projects with an estimated debt exposure of over Rs 21,000 crore under stress, ratings agency CRISIL said in its recent report, adding that there could be a problem of delayed payments from discoms and around Rs 10,600 crore may be at an immediate risk of default.

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