Jagan move to revisit Naidu’s energy agreements

The vow of Chief Minister YS Jaganmohan Reddy that he would revisit all the power purchase agreements (PPAs) entered during the five-year tenure of Nara Chandrababu Naidu seems to have hit a roadblock with the Centre objecting to it.

Central energy department secretary Anand Kumar in a letter to the Andhra Pradesh chief secretary LV Subrahmanyam has said that the proposed move as widely published in different media, would shake the confidence among investors and thus would adversely affect the energy interests at the national level. The CS was advised to apprise the CM of the situation.

The state is in a leading position in the country in terms of renewable energy with more than 7,000 MW of solar and wind projects. During Chandrababu Naidu rule till last month, the state had a target to increase its renewable energy capacity to 18,000 MW by 2021-22. However, Jagan was determined to review these agreements alleging that Naidu’s government had resorted to corruption in power agreements, resulting in exorbitant tariffs.

In his letter Anand Kumar said that the PPAs were made in a transparent way, following all the statutory procedures. “You would agree the contractual agreement once signed should not be revisited unless there is a specific provision to do so in the agreement or a case of conspiracy and undue gains is proved”.

“Various RE (renewable energy) project developers sign PPAs with the state government either under section 62 or section 63 of the Electricity Act. In the first case, the tariff is fixed by the state electricity regulatory Commission in line with CERC (Central Electricity Regulatory Commission) guidelines and in the second case the tariff is arrived at through transparent open competitive bidding basis. In both cases, SERCs (State Electricity Regulatory Commissions) conduct public hearings before adopting the tariffs and signing the PPAs”.

"As you are aware, the government of India has set a target of installing 175 GW of RE capacity in the country by 2022. Of this, 100 GW would come from solar, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro. In case of any PPAs revisited without a reason, it would affect the national programme," he wrote.

"I needless mention that revisiting PPAs shake the confidence of the investors in the sector and adversely affect the future bids and investment in the state and country. I shall be grateful if you could kindly apprise the Hon'ble Chief Minister of the above facts”, the letter read.