VIJAYAWADA: Even as the YSR Congress government is getting ready to review the power purchase agreements made during the previous Telugu Desam regime, the Centre has advised the Chief Minister Y.S. Jagan Mohan Reddy that it would be wrong and against the law to cancel all PPAs and said that if the contracts were not honoured, it might result in no investment to the state.
Union minister of state for power, new and renewable energy R.K. Singh wrote a letter to the CM stating that the renewable energy sector was one of the fastest growing sectors in the country and cautioned that if any impression was created that rule of law was not prevailing and the contracts were not going to be honoured, the investments would dry up resulting in the growth coming to a halt.
He said that tariffs were fixed by the regulators like Central Electricity Regulatory Commission at the Centre and State Electricity Regulatory Commission at the state level which work independently and added that they fixed tariffs after conducting a public hearing and also after examining all input costs. He opined that PPAs were contracts binding on all signatories.
He said that against this backdrop, it would be against the law to cancel the PPAs and instead recommended that appropriate course of action be initiated for the reopening and cancelling of only those contracts where a prima facie case of corruption was made out based on objective evidence.
The Union minister further said that tariff for solar and wind generation in different states would be different depending upon the solar insulation for solar energy and the CUF/Wind speeds for wind energy and added that he was enclosing a charge of tariff fixed in other states for reference. He opined that the chart would help the AP government to find out whether the tariff in PPAs signed earlier were reasonable or not. He also suggested looking for concrete evidence of malpractice to find out corrupt practice in a particular case so that action could be taken up by cancelling the PPA and prosecution could be started.
