Amaravati: As announced, the Chief Minister YS Jagan Mohan Reddy has constituted a High Level Negotiation Committee (HLNC) for Power Purchase Agreements (PPAs) to review, negotiate and bring down the high wind and solar energy purchase prices. The HLNC asked to complete the negotiations and submit a report to the Government within 45 days, calculating from Monday onwards.
Government observed that the Power Distribution Companies (DISCOMS) in the state are in financial crisis with huge power purchase dues amounting to about Rs 20,000 crores as on date.
One of the major reasons for this is the issue of abnormally priced wind and solar power purchase agreements entered in the recent years. In order to ensure that consumers are provided with affordable power and DISCOMS are pulled out of the financial distress there is a need to review and renegotiate the exorbitantly priced wind and solar PPAs.
Srikant Nagulapalli, Secretary to Energy department has released the Government Order RT No 63 on Monday appointing nine members HLNC. They include B.Rajendranatha Reddy, Minister for Finance and Legislative Affairs, B. Sreenivasa Reddy, Minister for Energy and EFS & T Department, S Sriram , Advocate General, A.P.High Courts Ajeya Kallam, Principal Advisor to Chief Minister, S.S.Rawath,IAS, Principal Finance Secretary, Finance Department, N.Srikant,IAS, Secretary to Govt, Energy Department, D Krishna, Special Secretary to Chief Minister, Gopal Reddy, former CMD, APSPDCL, Joint Managing Director, APTRANSCO, Member- Convenor.
This committee has mandated to review the high priced wind and solar agreements, negotiate with those who are selling wind and solar energy to DISCOMS and bring down the prices and make suitable recommendations.
Government suggested HLNC to study the lowest Wind and Solar energy rates in the corresponding years in the country, rates prevailing currently. The opportunity cost for power from APGENCO plants, existing thermal contracts and Central Generating Stations allocations.
It is worth to mention that Jagan announced that he would revisit all the PPAs undertook by the then Chief Minister N Chandrababu Naidu. As per that warning, he constituted this committee. Recently, the central government in a communication with state government observed that revisiting of PPAs would have negative impact on the renewable energy sector across the country.