Andhra Pradesh

No wrongdoing in PPAs: Naidu

TDP national president N. Chandrababu Naidu addressing the media at Mangalagiri on Wednesday.

TDP national president N. Chandrababu Naidu addressing the media at Mangalagiri on Wednesday.  

‘They are based on cost of production and regulatory framework’

Former Chief Minister N. Chandrababu Naidu on Wednesday refuted the allegations by the YSRCP government over the power purchase agreements (PPAs) his government had entered into with renewable energy plants, and said the cost per unit paid by his dispensation was far lesser than other States.

“What do the allegations mean? Should not the government enter into PPAs anticipating technology innovation and future lower costs? Should the government allow the State to be in the dark?” Mr. Naidu sought to know while addressing the media at Mangalagiri.

Mr. Naidu further said the PPAs were based on the cost of production of power and as per the regulatory framework.

RPRO targets

Releasing a detailed paper on the PPAs entered into during his rule, Mr. Naidu said the Renewable Power Purchase Obligation (RPPO) targets were set by the A.P. Energy Regulation Commission during 2014-2019.

Gas allocation

If the targets were not met, the Discoms would have to purchase the Renewable Energy Certificates (RECs) from the non-renewable energy firms.

Mr. Naidu denied there was loss due to gas allocation to Spectrum and Lanco.

Stating that the PPAs with Lanco and Spectrum had expired in 2016, Mr. Naidu said as per the APERC orders, power was being procured from Lanco and Spectrum at the per unit rate of ₹3.29 and ₹3.32 respectively, pending decision on renewal of the PPAs.

The total gas available from Lanco and Spectrum was 1.1 MMSCMD, and they had signed Gas Supply Agreement with the Government of India till 2022.

Even if gas was diverted, as per the A.P. Reorganisation Act of 2014, the State would get only 46% share of power, and 54% would go to Telangana and A.P. Discoms would then be required to buy alternative power at high cost, Mr. Naidu said, adding that the average landed cost of power even if Government of India diverted gas to GMR would be ₹3.85.

Further, the loss of ₹276 crore being projected by the YSRCP government was based on future calculations that the power tariff of Lanco and Spectrum would be expensive when compared to that of GMR.

The YSRCP government did not consider the fact that as per the Act, 54% of GMR power would go to Telangana, which was a loss to the State. Further, the decision on diversion of gas had to be taken by the Government of India and not the Government of Andhra Pradesh, he said.

UDAY funds

“During the YSR rule exorbitant rates had been paid to purchase power at ₹16 per unit in 2009 leading to a debt of ₹6,600 crore. In 2014, we were able to repay the debt by tapping ₹8,892 crore under UDAY,” said Mr. Naidu.

He further said that non-renewable energy emerged as an alternative to coal- based thermal plants, as lack of availability of coal increased the operational costs.

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Printable version | Jun 7, 2020 9:53:50 AM | https://www.thehindu.com/news/national/andhra-pradesh/no-wrongdoing-in-ppas-naidu/article28527761.ece

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