Andhra Pradesh has called wind developers for a tariff renegotiation meeting next week even after power and renewable energy minister RK Singh strongly communicated his displeasure to the state government about moves to reopen or cancel renewable energy contracts.
Wind PPAs (power purchase agreements) that are entered after the year 2012 have caused unjustified burden on discoms (distribution companies) and consumers of state,” the chief general manager of Andhra Pradesh Southern Power Distribution Co. said in a letter to the developers on Friday. “The government of Andhra Pradesh has constituted a high-level negotiation committee.”
Singh told Andhra chief minister YS Jaganmohan Reddy in a letter that reopening or cancelling signed contracts are against the law and will also drive investors away.
It would be wrong and against the law to cancel all the PPAs. The appropriate course would be that action for the reopening and cancelling a contract is only taken in those cases where a prima facie case of corruption is made out based on objective evidence.
He went on to say that investments will dry up if contracts are not honoured because tariffs were fixed after public hearings and examining input costs.
Reddy, who took office at the end of May, is of the view that many wind and solar energy contracts were signed at rates higher than in other states. He formed a committee that will review the prices and based on its report, may renegotiate the PPAs.
Andhra Pradesh has a commissioned capacity of 7,257 MW of renewable energy, with solar at 3,279 MW and wind at 3,978 MW, according to Bridge To India, a consultancy firm. India had 29,409 MW of installed solar power capacity and 36,089 MW of wind energy at the end of May, data on the Central Electricity Authority’s website showed.
This by itself will not be sufficient - there will also need to be concrete evidence of malpractice to be able to come to a finding of there having been corrupt practice in a particular case.
Renewable energy ministry secretary a couple of weeks ago, cautioning him against renegotiating signed agreements. “These are valid contracts. They cannot be revisited unless there is a clause for review,” 0.“These contracts were accepted by the SERC (state electricity regulatory commission) through a public hearing. They would have to go to APTEL (appellate tribunal), high court or the Supreme Court, follow the due legal process
Referred from economic times