VIJAYAWADA: The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued a significant order approving the Power Purchase Agreement (PPA), and determining the capital cost and tariff for Unit-2 of Project-1 (660 MW) of SEIL Energy India Limited, located in Nelatur and Pynampuram of Nellore district.
The order, dated June 17, 2025, addresses two petitions, one from APDISCOMs — APSPDCL, APEPDCL and APCPDCL — for PPA approval, and another from SEIL for capital cost and tariff determination for FY26-FY29.
The 12-year PPA, effective from the approval date, was greenlit with conditions. APERC restricted power generation to concessional or zero-premium coal allocated under the Shakthi B(iii) policy, allowing DISCOMs flexibility to procure power using premium coal when needed.
The obligation for DISCOMs to pay 70% of fixed costs during non-offtake periods or cover SEIL’s Force Majeure costs due to political events was rejected.
SEIL can sell power to third parties using premium coal if DISCOMs demand is low.
APERC approved a capital cost of Rs 4,792.43 crore, lower than SEIL’s claim of Rs 4,816.66 crore. The weighted average cost of capital was set at 11.64% (against SEIL’s 13.72%), with a debt-to-equity ratio of 70:30, compared to SEIL’s 32.27:67.73.
The total fixed cost for FY26-FY29 was approved at Rs 3,067.22 crore, significantly below SEIL’s Rs 3,977.92 crore. For FY 25-26, fixed charges per unit at 85% target availability were set at Rs 1.68, down from SEIL’s Rs 2.17.
Energy charges were reduced to Rs 2.83 per unit from SEIL’s Rs 3.05, resulting in a per-unit cost of Rs 4.51 for FY 25-26, competitive with other regional power plants. SEIL can file separate petitions for additional capital expenditure