VIJAYAWADA: The State discoms have filed a writ petition in the Andhra Pradesh High Court on Tuesday, challenging the proceedings of the Ministry of New and Renewable Energy (MNRE) and the Power System Operation Corporation of India (POSOCO), which had given discoms time till October 15 to issue letter of credits (LoCs) to solar and wind power generation firms for the purchase of power. The court reportedly stayed the ministry’s directive by three weeks and posted the matter for hearing on November 5.
According to information, the discoms filed a lunch motion petition after it received a communication from POSOCO recently that if the discoms failed to issue LoCs to wind and solar power generators by the said date, they will face the prospect of losing the right to transact with Power Exchange India and short term open access.
The POSOCO, it is learnt, sent the letter to the energy department after a generator made a representation over non-issuance of LoCs. The discoms challenged the decision, contending that the condition of giving LoCs as part of PPAs was waived by the power generation firms concerned.
‘Centre’s action tantamount to rewriting PPA terms’
They added that the Centre as a third party could not interfere in the contract conditions of PPA and that the Centre nor the other agencies of central government had no judicial power to put a few discoms away from Power Exchange of India and short term open access that are governed by the Central Electricity Regulatory Commission (CERC).
The State also contended that the action of the Centre and its agencies amounts to rewriting the terms of PPA, entered between discoms and generators. It also pointed out that the Centre was a party to a round of litigations over PPAs in the same high court and was bound by the court’s determination, and can’t override the verdict to enforce contractual clauses.
For the record, the ministry of power had made issuance of letter of credits mandatory by discoms from August 1 in a bid to address the problem of non-payment of bills to power generators. Even though the State issued LoCs to firms like NTPC and also agreed to release `550 crore every month for the same, it did not do so in the case of renewable power generators. With this, POSOCO, after consultation with the MNRE, shot off a letter to the State, giving time till October 15, to issue LoCs.