Andhra Pradesh asks SECI, NTPC to revise tariffs for some solar projects

NEW DELHI: The new government in Andhra Pradesh has asked NTPC and Solar Energy Corp of India (SECI) to revise tariffs for power from 1,650 megawatt of solar projects to Rs 2.44 per unit retrospectively from the time of commissioning of the plants in 2016.
In a letter to NTPC, government-run southern power distribution company of Andhra Pradesh sought revision of tariffs from solar plants in Anantpur district (250 mw) and Kurnool (1,000 mw). The tariff from the Anantpur plant has been fixed by the state's regulator at Rs 5.96 per unit. Bundled power from the solar park in Kurnool was supplied at a weighted average of around Rs 4.61 per unit in 2018-19.

The state’s power distribution companies had signed contracts also with the projects of Acme Solar (150 mw), Azure Power (50 mw), Tata BP Solar (100 mw) and FRV Solar (100 mw) at Rs 4.50 per unit through bidding conducted by SECI.

In separate letters to NTPC and SECI, written on behalf of the state’s power distribution companies, the discom alleged that the tariffs in 2016 were not discovered through competitive process and hence subject to revision. The letters said in the subsequent years, solar tariffs had come down to Rs 2.44 per unit for the entire long-term period and many other states are paying lower tariffs for solar power.

ET has seen copies of the letters.

The distribution company said the state’s discoms had faced setback in their financial status because of the high cost of power and were unable to pay the monthly power bills.

“You are requested to reduce the tariff to Rs 2.44/Kwh from the date of commissioning of the project. You are further requested to revise the bills within 10 days that are already submitted and due for payment,” it said, adding: “Otherwise you may submit your view before the high-level negotiation committee which is appointed by the government.”

The YS Jagan Mohan Reddy government on July 1 ordered the constitution of a high-level committee to negotiate and reduce costs of “abnormally priced” wind and solar power purchase agreements entered into between developers and state distribution companies during the previous Chandrababu Naidu regime. Its move came despite the BJP-led government at the Centre asking the state to retain the renewable energy PPAs.

Union power and renewable energy minister RK Singh last week wrote to Reddy urging him to cancel power purchase agreements only when there was evidence of malpractice.