APERC refuses to consider APGenco request to cancel PPAs

The state govts of Andhra Pradesh and Telangana are at loggerheads over the decision of APGenco to cancel the PPAs

The Andhra Pradesh Electricity Regulatory Commission (Aperc) had refused to consider the request made by AP Generation Corporation (APGenco) to cancel certain power purchase agreements (PPAs) entered into with power plants located in Seemandhra.

“The commission is unable to consider the request since it has not been made by the parties who filed the PPAs before the commission,” Aperc stated on Thursday.

The state governments of Andhra Pradesh (AP) and Telangana are at loggerheads over the decision of APGenco to cancel the PPAs.

Following the controversial decision of APGenco, the Centre had intervened and asked the AP government not to make any changes in PPAs or in the allocation of power to Telangana. However, the issue was not resolved.

On Thursday, the AP State Load Dispatch Centre (APSLDC) had written a letter to the Southern Regional Power Committee (SRPC), Bangalore, and the National Load Dispatch Centre (NLDC), Delhi, justifying the cancellation of PPAs.

The letter pointed out that the PPAs were not valid as the AP Electricity Regulatory Commission had “not given its approval” to them. It further stated that the AP government, “after careful examination” had directed APGenco to withdraw the”"draft PPAs” and directed APSLDC to schedule the entire power generated only to AP distribution companies.

The Telangana government is against APGenco’s decision as it would result in a loss of 600 Mw of power it is entitled to according to the AP Reorganisation Act.

While the Act provides for division of power plants between the two states “based on geographical location”, it stipulates that power generated should be shared on the basis of consumption pattern. Thus, Telangana gets 53.89 per cent and AP is allocated 46.11 per cent of the total 16,465 Mw generated by power plants in both the states.

In contrast, the installed generation capacity of power plants located in Seemandhra stood at 9,852 Mw, much higher than the installed capacity of 6,413 Mw of all power plants in Telangana.

Consequently, the AP government feels that it has got a raw deal with regard to power distribution. AP chief minister, N Chandrababu Naidu, had requested Prime Minister, Narendra Modi, to “rectify this anomaly”.

On the other hand, Telangana chief minister, K Chandrasekhara Rao, had also reportedly decided to represent to the Prime Minister against the AP government’s decision.