Against the backdrop of a cautionary letter by Union Minister for Power R.K. Singh, Principal Advisor to the Chief Minister Ajeya Kallam justified the government’s decision to review the renewable Power Purchase Agreements (PPAs) on the ground that the Andhra Pradesh (A.P.) government and the discoms were not in a position to honour them due to their exorbitant costs and the ‘ mala fide intentions’ behind them.
Mr. Kallam claimed that some leading companies were willing to supply renewable energy at just ₹2.70 a unit without having to sign the PPAs. Solar energy tariff fell to as low as ₹2.45 and wind hit a rock-bottom of ₹0.43, but the TDP government had purchased wind energy at ₹4.84 per unit and solar ₹6.99 a unit.
“It may be noted that the State bought power beyond the Renewable Power Purchase Obligation (RPPO) knowing fully well that it was going to cause a loss of nearly ₹2,500 crore for the last three years and the burden will continue for the next 22 years of the PPA period.
If these prices are compared with the lowest rates prevalent in the country, the losses due to those purchases will amount to about about ₹3,000 crore per year,” he pointed out.
Addressing media persons along with Special Chief Secretary to CM, P.V. Ramesh and Secretary (Energy) N. Srikant on Monday, Mr. Kallam said of the 221 PPAs in wind energy, more than 70% which were signed after 2014 and valued around ₹40,000 crore benefited only five players and asserted that the previous government had introduced ‘must run’ condition as an ‘incentive’ by concealing the long-term financial implications.
This was done to procure power at high costs.
Mr. Kallam alleged that wrong calculations were filed before the AP-Electricity Regulatory Commission, which led to the fixation of high tariffs.
‘Will talk to developers’
He said the government would examine the criminal angle and take appropriate legal action against those responsible for the purchases after the Cabinet Sub-committee and an independent committee submitted their reports.
At the same time, a high-level committee constituted by the government would listen to what the developers have to say and negotiate the PPAs to bring down the unsustainable costs. The illegal purchases would not have happened without the leadership of the then government, he observed.
Mr. Srikant said the discoms were steeped in losses amounting to ₹20,000 crore and they owed huge sums to the banks.
