The Hindu : Andhra Pradesh / Hyderabad News : State on collision course with APERC?

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Friday, Aug 22, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

State on collision course with APERC?

M. Malleswara Rao

HYDERABAD: Is the Government on a path of confrontation with the Andhra Pradesh Electricity Regulatory Commission (APERC)?

It appears to be on a collision course going by the way the Government enhanced the price to be paid by AP Transco to developers of wind energy by 40 paise a unit, taking it to a total Rs. 3.50, thereby crossing the ceiling of Rs. 3.37 a unit prescribed by the APERC in its order.

This is the second hike in five months. The Government had earlier hiked the price from Rs. 2.70 to Rs. 3.10 a unit.

As a result, there will be an extra burden of Rs. 15.4 crore annually on the consumers, calculated on the 107 MW capacity existing under wind-mills now. When reckoned for the 2110 MW capacity planned under wind-mills now, the burden will go up to Rs. 288 crore and reaching Rs. 5,760 crore for the 20 years that the power purchase agreements will be in force.

Under the AP Electricity Reforms Act, the Regulatory Commission is the ultimate authority in electricity matters with quasi-judicial powers. However, the Government is empowered to take policy decisions on issues like purchase price hike but subject to the condition that it gives subsidy to avoid burden on consumers. In the present case, no such subsidy has been indicated.

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