VIJAYAWADA: As the power sector is the backbone of state economy serving every household in the state and empowering the rural people, particularly farmers, the government has initiated stringent steps to strengthen the power sector. “A major surgery is also required for streamlining the sector for the sake of the people,” said Chief Minister Y.S. Jagan Mohan Reddy. These remarks come in the backdrop of the Centre objecting to the review of the Power Purchase Agreements (PPAs) initiated by the state government.
The Chief Minister has emphasised the need to initiate short term and long term measures to strengthen the power sector with the rider that it could turn into a nightmarish scenario if the government did not take immediate steps to protect the sector. He also said that the government was strongly determined to improve the core sectors like power, irrigation and agriculture and make this its core focus. Discoms owed Rs 18,375 crore to power generation companies like APGenco, Non Conventional Energy (NCE) sources and others as on May 31, 2019. Discoms had failed to pay the dues due to severe financial crisis.
Disclosing the above views of Chief Minister, energy minister Balineni Srinivasa Reddy, during a brief interaction with officials on the 9-hour free power supply to the agriculture sector over telephone on Sunday, said that the Chief Minister had directed officials to initiate a major exercise to get it out of crisis and strengthen it to provide better services to the people.
The officials informed the CM that the aggregate revenue requirement (ARR) in 2019-20 was Rs 35,857 crore as per the AP Electricity Regulatory Commission (APERC) report. But, the Discoms owed Rs 18,375 crore to the power generation companies including APGenco and Non Conventional Energy (NCE) sources.
At the same time, the government had to pay Rs 10,400 crore to Discoms. Moreover, the total burden on Discoms due to purchase of solar and wind power on must-run basis was Rs 2,636 crore between 2015-16 and 2018-19 and the projected burden for 2019-20 was Rs 1,300 crore, he said.
The minister explained that in a state like Andhra Pradesh, more than 70 per cent people depended on agriculture and allied activities. So the government was trying to do everything in a transparent way to strengthen the power sector which was the key to the good functioning of agriculture, irrigation and industrial sectors.
He also said that the measures being taken by the government to lay a strong foundation to the power sector would help to sustain the daytime free power supply for nine hours to the agriculture sector, provide 24x7 uninterrupted power supply and quality power supply at affordable prices in future.
The energy minister said that Chief Minister was extremely keen to plug loopholes in all key areas of the power sector like power purchase, execution of projects and maintaining quality in power supply. “The CM is determined to strengthen APGenco, the public sector power generation utility, to meet the electricity requirements and provide cost effective power. A high level committee was appointed to review power purchase agreements and they are working hard to explore ways to save huge public money to the state exchequer,” the energy minister said.
Commencing the free power scheme within a month after formation of new government was indicative of the CM’s strong commitment towards farmers. The CM had sanctioned Rs 1,700 crore to improve infrastructure immediately after the officials submitted a report before him, the minister said.
Welcoming the State Budget, energy secretary, CMD, APTransco Srikanth Nagulapalli said the government has made major allocations to the power sector. He said that Rs 4,525 crore was allotted to daytime free power to agriculture against the total allocation of `6,881 crore to the entire power sector. “This will be a great boon and will help meet the requirements of farmers and also aid in the development of the sector,” he said.
