The Generation Corporation of Andhra Pradesh (APGenco) may have withdrawn from the Power Purchase Agreements (PPAs) signed with the discoms in the united State, but entering into fresh agreements with the discoms in the bifurcated state may not be that simple.
According to the Electricity Act, 2003, fresh agreements are possible only through a process of competitive bidding, and not according to the whims of the powers that be – State heads or the heads of the corporations.
Highly-placed sources from AP government said the APGenco might enter into fresh pacts with the APEPDCL and APSPDCL shortly, following its recent withdrawal from the agreements pertaining to 10 power generating stations for which the regulatory approval was pending.
Advantage-customer policy“Schedule 63 of the Act, and the National Tariff Policy formulated in 2006 in line with the Act, both promote transparently-held competitive bidding process by the discoms to finalise the tariff, so that the consumers will have the advantage,” a source from APTransco informed.
However, the Ministry of Power issued directions granting a five-year relaxation to Public Sector Units from this clause. PPAs were signed in large number between APGenco and discoms before the end of the period in January, 2011.
“After 2011, if a PPA is to be signed, it should be only through competitive bidding process,” the source says.
What next?In view of the rejection of its withdrawal from PPAs by AP Electricity Regulatory Commission, and the roadblock of competitive bidding for entering into fresh PPAs with discoms, the next course of action by AP government assumes significance.
On Saturday, the APGenco CMD K. Vijayanand is learnt to have had a closed door meeting with APERC Chairman V. Bhaskar, and discussed the corporation’s withdrawal from the agreements. He reportedly presented copies of the withdrawal letters, which had been sent to the respective discoms, to the chairman.
