Andhra agrees to pay renewable projects at average rates till resolution

Andhra Pradesh has submitted to the High Court it will pay solar and wind power producers at an average rate even as legal proceedings continue over the state’s decision to review the tariff of all renewable power projects. The power distribution companies of AP said they will pay solar power project Rs 2.44 per unit (kilowatt an hour) and wind projects Rs 2.43 per unit till the issue is resolved. 

Both outstanding and future payment will be made at the same rate. The average rate decided by the state is half of what is the prevailing rate for solar and wind projects in the state. The average tariff of wind projects in Andhra is Rs 4.8 and for solar is Rs 4.5. 

Sources said discoms on Friday submitted an affidavit with an undertaking to make payment within four weeks, starting December 20. “The High Court recorded undertaking given by discoms and directed them to positively comply with the terms of affidavit,” said the person.

Of the total dues of Rs 1,450 crore towards renewable energy projects, state government has paid Rs 355 crore and is awaiting funding from central agencies to pay off the balance, said the affidavit by the state in the HC. Business Standard has reviewed the affidavit. Project developers have alleged that they have not been paid for over 6-8 months. 

The matter refers to the legal fight between state government of Andhra Pradesh and project developers over decision of the State to reduce the power rates of all renewable projects. 

The YSR Congress government in Andhra Pradesh in July formed a high-level negotiation committee (HLNC) to “review, negotiate and bring down” the tariff of all renewable power projects that had been given out by the previous Telugu Desam Party government.

It cited poor financial health of its discoms for the revision. As the companies protested against this decision, the state government curtailed the purchase of renewable power.

Renewable power project developers in the state moved the Andhra Pradesh High Court, which ruled in favour of the companies. In an order on September 24, the court dismissed the HLNC. Despite that, the state has continued to curtail power purchase from renewable projects. The government has filed a review petition before the high court against its earlier order. 

The renewable power project developers also moved the AP Electricity Regulatory Commission (APERC) against the government which will decide on the tariff of these plants.