Andhra govt to press for revised power prices from renewable energy firms

Sets up panel for the purpose, citing Rs 2,636 cr loss due to expensive power purchases; CM directs officials to recover excess payments made towards earlier power purchases

The Andhra Pradesh government has decided to constitute a committee to negotiate a revision in power prices with solar and wind energy producers, as it believes the prices are higher than those determined through competitive bidding conducted for energy procurement by other government agencies.

The decision to constitute a negotiation committee was taken at a review meeting on Tuesday, where Chief Minister Y S Jagan Mohan Reddy said that the state exchequer had incurred a staggering Rs 2,636-crore loss by way of excess payments towards power purchases due to the higher tariff collected by private renewable energy developers.

The government would not hesitate to scrap the power purchase agreements of the concerned projects if the developers do not bring down the prices, Jagan told officials. He also instructed them to take steps to recover the excess payments made towards earlier power purchases.

As soon as the YSR Congress Party formed the government last month, Reddy declared renegotiation of power purchase agreements as a key priority of his government, stating that this was part of a plan to expose the alleged corruption of the previous government.

He cited the large variation in prices quoted by the developers in competitive bidding versus those fixed in the PPAs. The Union Energy Ministry and power producers have already appealed to the state not to take any hasty decision in this regard as several issues determined the tariff at different points of time.

The state government has also decided to constitute a cabinet sub-committee to probe as many as 30 matters involving alleged irregularities, with the help of the state investigative agencies.

Andhra Pradesh had attracted large investments in the renewable energy sector during the past five years