Stick to Power Purchase Agreements, High Court tells Andhra Pradesh Power Discoms

As the state government sought to go ahead with its decision, the clean energy generators filed petitions in the AP High Court challenging the former's actions.

The Andhra Pradesh High Court on Tuesday ordered the Power Distribution Companies (Discoms) to honour the Power Purchase Agreements with solar and wind energy generators and make all payments accordingly.

A division bench of the High Court, comprising Chief Justice Prashant Kumar Mishra and Justice N Jaya Surya, set aside a single judge’s earlier order fixing an interim tariff of Rs 2.44 per unit of solar power and Rs 2.43 for wind power.

The bench also quashed two petitions pending before the AP Electricity Regulatory Commission (ERC) on the tariff issue, saying it was “not open for the parties and for the Commission as well to undo the tariff discovered through competitive bidding process under Section 63 of the 2003 (Electricity) Act.” The High Court order effectively puts paid to the YS Jagan Mohan Reddy government’s bid to annul the PPAs signed during the previous Chandrababu Naidu regime wherein a tariff of Rs 5.99 per kWh was adopted for the first year.

A Government Order issued on July 1, 2019 for negotiating fresh rates for solar and wind power also stands quashed.

The Jagan Mohan Reddy government’s move elicited criticism from various quarters even as the Government of India took strong exception to undo the PPAs already signed.

The Union Power Ministry had in fact warned the state government against the move, saying it would have adverse implications.

As the state government sought to go ahead with its decision, the clean energy generators filed petitions in the AP High Court challenging the former’s actions.

A single judge had in 2019 passed an order directing the Discoms to pay the solar and wind power generators at an “interim rate” till the dispute was resolved by the ERC.

The division bench that heard the appeals against the single judge’s order, noted that ERC adopted the tariff on February 21, 2015 “after applying its mind and on being satisfied with the legitimacy of the transparent competitive process being followed.” “The ERC is now trying to undo the tariff discovered under the process, envisaged under Section 63 of the 2003 Act by adopting the procedure prescribed under Section 62 of the Act, which is not at all permissible,” the division bench observed.

The bench also dismissed the writ appeals filed by the State Load Dispatch Centre, related to curtailment of power and upheld the single judge’s order in this regard.