Andhra Pradesh

Financial hardship cannot be ground to avoid payment, argue power companies

A view of the Andhra Pradesh High Court building at Nelapadu village capital area in Amaravati.

A view of the Andhra Pradesh High Court building at Nelapadu village capital area in Amaravati.

A Division Bench of the High Court led by Chief Justice Prashant Kumar Mishra and comprising Justice N. Jayasurya heard the petitions that challenged the State government’s decision to review the Power Purchase Agreements (PPAs) on Monday.

Representing the power companies, senior advocate C.S. Vaidyanathan and counsels Basava Prabhu Patil, Sajan Poovaiah, Aniket Prasun and Challa Gunaranjan argued that the review of PPAs was apolicy initiated after the change in government in 2019 and such regime changes can’t be the basis for such decisions of the government.

They insisted that financial hardship could not be a ground for the DISCOMs to avoid payment obligations under a PPA and observed that the government was responsible for their woes as it did not pay their subsidy grants and receivables amounting to nearly ₹25,000 crore. The government can’t do charity with the monies of power producers, they said. Further, the petitioners’ advocates said that having found the relevant G.O and the show cause notice to be bad, the High Court could not have granted interim relief of payments at ₹2.43 per unit.

Advocate General S. Sriram said it was not a case of ‘regime revenge’ as alleged and maintained that the process of seeking amendment of the tariff began in 2015 itself and a case was filed with the AP Electricity Regulatory Commission (APERC) in 2018.

He contended that there were lawful grounds for the review of PPAs as disclosed by the DISCOMs but for some reason, the power producers appear to be wanting to evade scrutiny by the APERC withregard to the viability of the pricingmechanism.

The DISCOMs areenabled by law and the APERC is alsoempowered to undertake a revision of tariffs, he asserted.

The matters were adjourned for further hearing on January 18


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Printable version | May 19, 2022 10:51:09 am | https://www.thehindu.com/news/national/andhra-pradesh/financial-hardship-cannot-be-ground-to-avoid-payment-argue-power-companies/article38284329.ece