VIJAYAWADA: Terming renewable power purchase agreements (PPAs) inked during the TDP regime a major scam, Chief Minister YS Jagan Mohan Reddy on Friday accused his predecessor N Chandrababu Naidu of buying wind and solar power over and above the State’s obligation only to benefit a few companies.
Participating in a discussion on PPAs in the Assembly, Jagan cited statistics to buttress his argument that power was bought at inflated prices deliberately. “Because of this, the State incurred an additional cost of Rs 5,497 crore on renewable energy. As far as renewable power obligations are concerned, Naidu, having served as chief minister, ought to know that the State Electricity Regulatory Commission (APERC) need not follow Central Electricity Regulatory Commission guidelines.
APERC frames guidelines for the State. As per the APERC, the State’s renewable power purchase obligation was 5 per cent in 2015-16, whereas the actual power purchased was 5.59. In 2016-17, the obligation was 5 per cent and the actual power purchased was 8.6 per cent. In 2017-18, RPO was 9 per cent, the actual was 19 and in 2018-19, the RPO was 11 per cent and the power purchased was 23.4 per cent,” he explained, adding that Rs 5,497 crore was spent as a result of additional cost incurred beyond RPO and additional cost incurred within RPO.
Going into the losses caused to Discoms, the Chief Minister pointed out that wind power was bought at a cost of Rs 4.84 per unit though thermal power was available at Rs 4.20 per unit. Of the Rs 4.20 thermal power cost, Rs 3.10 is variable and the rest fixed. “Due to the regulations in place, we were forced to pay Rs 1.10 fixed cost per unit to Central thermal units whether we used thermal power or not. Despite knowing this, Naidu preferred wind power and the State ended up paying Rs 4.84 per unit for wind power besides Rs 1.10 per unit for even unused thermal power.
In effect, spending Rs 5.94 per unit. This has been going on for the last three years and the loss caused was Rs 1.70 per unit which amounts to Rs 2,764 crore per annum,” he explained. Drawing parallels with other States, he said wind power was available in Gujarat for Rs 2.43 per unit. According to him, if that is taken as a benchmark, the State suffered Rs 3,831 crore loss annually. He further pointed out that of all the PPAs signed with wind power companies, just three, Greenco (32%), Renew (22%) and Mytrah (9%) accounted for 63 per cent of the total power purchased. Refuting Naidu’s argument that the State received incentives for exceeding renewable energy targets set by the Centre, Jagan scoffed that the incentive of Rs 1.54 per unit couldn’t possibly offset the losses suffered. “In 2016-17, the State received zero incentive. The next year, just Rs 280 crore and the following year, Rs 320 crore. Where are the benefits and where are the losses?” he questioned.
On Naidu’s contention that technology brought down rates, he asked, “It is true that technology is advancing in this sector and rates come down accordingly. But this begs the question as to why Naidu signed PPAs for 25 years? Will anyone with even an iota of intelligence do it? With losses of over Rs 2,700 crore per year for 25 years? Is it justified to burden people like this?” He also recalled that the TDP regime had even amended that APERC Act to nominate a person of its choice as the Chairman. “The Act was amended to relax the age criterion from 65 to 70.”
He punched holes in the TDP chief’s claims that within two months of coming to power in 2014, he had made the State power surplus. Citing official records approved by the APERC, he said the State had surplus power from 2015-16 and questioned why PPAs were signed when the State had surplus power. Jagan observed that inflated power tariff had an adverse impact on industries whose GVA came down from 25.48 per cent in 2014-15 to 22 in 2017-18. “The APSPDCL’s revenue wasn’t enough to cover for the additional cost incurred on renewable energy forcing the government to increase subsidies. The government subsidy for APSPDCL increased from Rs 2,000 crore to over Rs 4,000 crore. Can the State afford these subsidies?” he wondered and said facts would come out in the expert committee report.