Centre has to bail out discoms: Balineni

State Energy Minister Balineni Srinivasa Reddy has urged Union Minister of Power RK Singh to constitute a committee to explore ways to bail out debt-ridden State discoms. 

Published: 13th October 2019 08:26 AM  |   Last Updated: 13th October 2019 08:26 AM   |  A+A-

State Energy Minister Balineni Srinivasa Reddy

State Energy Minister Balineni Srinivasa Reddy (Photo | EPS)

By Express News Service

HYDERABAD: State Energy Minister Balineni Srinivasa Reddy has urged Union Minister of Power RK Singh to constitute a committee to explore ways to bail out debt-ridden State discoms. 

In a letter to Singh on Saturday, the minister observed that the State has to be compensated for the additional cost thrust on the exchequer due to encouragement of renewable power by the Centre, and added that it is appropriate that the Union government pay for the wind and solar promotion policies.

In a strongly-worded missive, Balineni claimed that AP ‘is penalised’ for being a State with the highest share of renewable power at 25 per cent of total annual consumption.

“Andhra Pradesh is penalised for being the first State in the country with the highest renewable energy consumption. The State consumes 15,000 MU of VRE every year out of 60,000 MU annually.

"The integration costs of variable renewable energy (VRE) stands at `3.55 per unit, resulting in a burden of Rs 5,325 crore annually, in addition to the high costs the State pays for procurement of wind and solar power,” he noted.

The minister pointed out that the State is shouldering the responsibility of fulfilling the commitments of the Centre made in Intended Nationally Determined Contributions (INDC) under the UN framework for convention on Climate Change. He said AP is the frontrunner in meeting the target of 175 Giga Watts of renewable energy generation by 2022.

He, however, quickly added, “AP is to be compensated for the additional cost thrust on it due to encouraging the renewable energy generation as it is a newly created agrarian — and deficit — State with a tiny economy...Just as the State government pays for its welfare policies by paying agricultural subsidies, it is appropriate that the Government of India pays for its wind and solar promotion policies.” 

The minister also responded to the letter written by RK Singh to Chief Minister YS Jagan Mohan Reddy last month, stating that the mounting debts of AP discoms was due to the fact that the State did not hike the power tariff as per UDAY norms in 2016-17, 2017-18 and 2018-19. He said that the government rationalised the tariff annually as per the norms.

In an apparent reply to this, Balineni, in the letter, said, “Either referral of AP discoms to National Company Law Tribunal for their inability to pay the high tariffs or increasing the already high consumer tariffs will be unjust. It is therefore requested to constitute a committee headed by the Union Secretary for Power along with the Union Secretary for New and Renewable Energy, principal finance secretary and energy secretary from the State government to find a long-term solution to the problem.”

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