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1-min read

‘Jagan Govt Will Review & Cancel Inflated Power Deals, Committed to Bring Down Tariff’

Principal Advisor to the Andhra Pradesh government Ajay Kallam also raised suspicions about power lobbies playing a part in forcing the Union government to put pressure on the state against cancelling the agreements.

Syed Ahmed | News18

Updated:July 15, 2019, 9:55 PM IST
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‘Jagan Govt Will Review & Cancel Inflated Power Deals, Committed to Bring Down Tariff’
File photo of Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy.
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Amaravati: The Andhra Pradesh government has decided to review all agreements signed between the previous Chandrababu Naidu-led dispensation and power companies.

Principal Advisor to the government Ajay Kallam on Monday announced that all the power purchase agreements (PPAs) signed by the last Telugu Desam Party (TDP) will be looked into as there was a huge disparity in tariff.

The Jagan Mohan Reddy administration recently said an over-payment worth Rs 2,686 crore was made to electricity suppliers and after completing a probe into it, faulty deals would be cancelled.

Soon after, Union Minister for Renewable Energy RK Singh wrote to Reddy and advised him against the same as it would have a negative impact on suppliers and investors across the country.

Kallam said that officials found the TDP government bought power at a high cost from companies like Spectrum and Lanco Infratech even though their agreements had expired in 2016. The government plans to reallocate the gas allotted to these companies to GMR group that has a long-term PPA (till 2029) at a lower price, he said.

He said, “Neither the government is in a position to pay for this hiked prices nor can consumer pay the increased tariff.”

Regarding the Centre’s letter, the senior official said, “We are pained as rather than appreciating the chief minister for trying to weed out corruption, he is being questioned.” He also raised suspicions about power lobbies playing a part in forcing the Union government to put pressure on the state against cancelling the PPAs.

“Our government is deeply committed to protecting the interests of investors, and we would ensure transparent policies and sustainable power prices. Of the 221 PPAs in wind energy, more than 70% (worth Rs 40,000 crore) signed after 2014 benefitted mainly five players” the principal advisor said.

In the garb of Renewable Power Purchase Obligations (RPPO), the Naidu regime procured about 23% very high cost renewable power and incurred losses due to these high cost purchases.

A high-level committee has also been set up to hear the concerns of developers, negotiate these high-cost renewable agreements and bring down costs in a bid to bring relief to the consumers.

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| Edited by: Sohini Goswami
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