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Andhra Pradesh contests HC order prohibiting revision of PPAs

In an appeal filed in the high court, the government said it has the right to negotiate power tariffs. It said the single-judge bench erred in ruling that the government being a third party, had no power to issue the July 1order that directed a hi...

, ET Bureau|
Nov 12, 2019, 11.46 PM IST
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The appeal also said the high court should have refrained from passing an order in case of companies whose electricity generation was being curtailed by the state for grid safety reasons.
NEW DELHI: The Andhra Pradesh government has challenged an order passed by a single-judge bench of the state high court restraining the government from renegotiating or revising power purchase agreements (PPA) signed with renewable energy companies, saying the court order is “bad in law and contrary to the facts on record”.

In an appeal filed in the high court, the government said it has the right to negotiate power tariffs. It said the single-judge bench erred in ruling that the government being a third party, had no power to issue the July 1order that directed a high-level committee to renegotiate agreements and submit report to the state in 45 days.

The government order was followed by a July 12 letter sent by Southern Andhra Power Distribution Co to 139 power plants, asking wind plants to revise down the tariff to Rs 2.43 per unit and solar plants to reduce the price to Rs 2.44 per unit retrospectively.

The high court had on September 24 quashed the July 1 government order as well as the July 12 letters issued by the state power distribution company. The court had dismissed the case asking the parties to raise their objections before the Andhra Pradesh Electricity Regulatory Commission (APERC). A timeline of six months was set to resolve the issues. The discoms have asked the regulator to either cut the solar tariffs to Rs 2.44 per unit or reduce the tenure of the power purchase contracts.

“The single judge ought to have appreciated the fact that the discom is a contracting party being whollyowned by government of Andhra Pradesh... any deliberations without interfering with the powers of the statutory authority like APERC are not prohibited in law,” the government said it is appeal.

The appeal also said the high court should have refrained from passing an order in case of companies whose electricity generation was being curtailed by the state for grid safety reasons. The YS Jaganmohan Reddy-led Andhra Pradesh government has been arguing that the high cost power contracts were difficult to honour and the tariffs had to be revised downwards. The Union power ministry has been advising Andhra Pradesh to refrain from renegotiation of all renewable power contracts, as it sends wrong signals to investors.

Ambassadors of countries including Japan, Canada and France, some financial institutions and renewable energy developers had taken up the matter with Prime Minister Narendra Modi, Union power minister RK Singh and chief minister Reddy, raising concerns over the state’s move to reopen legal contracts.

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