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Nation Current Affairs 20 Jul 2019 Power purchase deals ...

Power purchase deals a big scam, alleges Y S Jagan Mohan Reddy

DECCAN CHRONICLE.
Published Jul 20, 2019, 2:41 am IST
Updated Jul 20, 2019, 2:41 am IST
Power was purchased from the private sector despite having surplus energy at its disposal.
Y.S. Jagan Mohan Reddy
 Y.S. Jagan Mohan Reddy

Vijayawada: Chief Minister Y.S. Jagan Mohan Reddy lambasted the previous TD government for its irrational approach in signing Power Purchase Agreements (PPAs) of renewable energy which caused a huge burden on the state’s exchequer and added that the exercise was taken up only to benefit a select few with ulterior motives.

Intervening during the discussion on demands on Energy, in the Assembly on Friday, the Chief Minister said that the previous government had taken arbitrary decisions to favour only three companies and had signed PPAs to buy wind power and solar power at a higher rate despite thermal power being available.  He added that the periodicity of the PPAs was pegged at a whopping 25 years and the TD government had gone to the extent of amending the relevant Act to suit its purpose and appoint persons of its choice by increasing the age limit.

 

Brushing aside the remarks of the Leader of the Opposition that the prices of any commodity would fall with the development of technology, Mr Reddy said, “In that case why did the previous regime sign PPAs for a long period of 25 years. The PPA has fixed the rate at `4.84 per unit though thermal power was available and we have to pay `1.10 mandatory price whether or not we use NTPC energy. This makes the total cost run into Rs 5.94 per unit which would burden the state by Rs 2,766 crore annually.”

Giving out data for the financial years 2015-16 to 2018-19 in a power point presentation, he said, the Renewable Power Obligations (RPO) was drastically increased from 5 to 5.59 per cent in the first year and from 11 to 23.4 per cent in 2018-19.  In terms of units it had purchased an excess of 1,740 MU in 2016-17, 5,102 MU in 2017-18 and 6, 952 MU in 2018-19. The total burden because of the purchase had accumulated to `5,497.3 crore.

The biggest flaw in the PPAs, the Chief Minister said, was that power was purchased from the private sector despite having surplus energy at its disposal. While the availability of energy was always more that the requirement during the past four years, there was energy breakdown in 2015-16, 2017-18 and 2018-19 while surplus energy of 10,473 Million Kwh was sold in the open market during 2016-17.

The three companies that took away the lion’s share were Greenco, Renew and Mytrah and the PPAs had ended up as a big scam.

The subsidy being given by the Centre was meagre and the consumption of power by the industrial sector had been coming down with every passing day. “To sum it up, the state has purchased power when there was no requirement, when power of other forms like thermal was available within the state, and even when there was power surplus. The previous government, which boasts of bringing in reforms in the power sector, has also increased the age of the chairman of Andhra Pradesh Electricity Regulatory Commission (APERC) to 70 years to suit their person of choice,” he said.

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