VIJAYAWADA: Notwithstanding the Centre’s caution against review of the renewable Power Purchase Agreements (PPAs), the State government is firm on going ahead with it, claiming they are a huge burden on the people as well as the government. “Shall we continue the burden? Shall we remain silent even as the PPAs are adding thousands of crores burden to the exchequer?’’ Ajeya Kallam, Principal Advisor to Chief Minister Y S Jagan Mohan Reddy, questioned.
He was reacting to the two letters written by the Centre to the State government suggesting that it desist from reviewing the PPAs. He said that the CM had brought the serious irregularities in energy purchases to the notice of Prime Minister Narendra Modi during the latter’s visit to Tirupati.
Speaking to reporters in the Interim Government Complex in Velagapudi on Monday, Kallam said that out of all the 221 PPAs for wind energy, more than 70% of about Rs 39,200 crore worth agreements for 25 years signed after 2014 benefited only five players. However, he asserted that the government was deeply committed to protect the interests of investors, and the rule of law through transparent policies.
On the letters written by the Centre, Kallam said the State government would give its reply. “The intention of the government is very clear. We want to cleanse the system and reduce burden on the public and government,’’ asserted Kallam.
Ajaya Kallam sought to buttress the State’s argument by referring to the Economic Survey 2018-19 released by the Centre. “The price of a unit of solar power, which was Rs 18 in 2010, has come down to Rs 2.44 per unit by 2018. Similarly, the cost of wind power that stood at Rs 4.20 per unit in 2017 came down to Rs 2.43 per unit now,’’ he said quoting the Survey.
When compared to these, the rates at which the then State government entered into agreements were very steep, not just five paise or 10 paise higher, he said.Kallam also rubbished the claim that review of PPAs would have an adverse impact on investments in the State. “In fact, companies are ready to invest in the State to produce wind power at Rs 2.70 per unit,’’ he said.
“What is the need to purchase wind power at a higher rate when power is being generated in the State at a cheaper price and thermal and hydro power is available?’’ Kallam sought to know.He said that all the PPAs entered into in the last five years would be reviewed to overcome the loss to the tune of nearly Rs seven crore a day and Rs 2,500 crore a year.
The government noticed that the previous government purchased power at a higher rate from Spectrum and Lanco even though their PPAs expired in 2016, he said. The TDP government entered into a short-term PPA at a higher rate with the two firms after the PPAs expired, causing crores of rupees loss to the exchequer.
“What is the problem with reviewing the PPAs if there are irregularities. Nearly 70 per cent of PPAs went to five companies. It is better for the companies to cooperate in the review of the PPAs. Otherwise, we will take further decision after the review,’’ he said.
Lavishing praise on former chief minister the late YS Rajasekhara Reddy government’s energy policy, Kallam said it had been ignored and it was proving to be a huge burden on the people and also the State exchequer.
“Andhra Pradesh still remains an agrarian State. The share of industrial energy sale revenue has come down drastically in the last five years because industrial growth slowed down in the newly bifurcated State. If the industrial energy prices are further increased, the industrial growth of the State, which is already suffering due to high power prices and denial of Special Category Status, will further deteriorate. This high cost power will be on our heads for the next 25 years. When industries are getting power at very cheap rates elsewhere in the country, how can Andhra Pradesh compete with other States if we offer such high cost power? Neither are the finances of the State government in a position to pay for these increases in State subsidy due to high cost renewable energy contracted since 2014 nor are the consumers in a position to pay increased tariff,’’ he said.
“We are pained because rather than appreciating the CM for trying to weed out corruption, he is being questioned for trying to stop this bleeding of our precious State resources for financial gain,’’ he remarked.
HLNC member replaced
In a related development, the State government on Monday replaced Advocate General S Sriram, who was member of the High Level Negotiation Committee (HLNC) constituted to renegotiate and bring down costs of all the high-priced wind and solar PPAs, with Secretary to Government, Law Department
