Power struggle: AP defends, regulator rejects

Hyderabad In a setback to Andhra Pradesh government, the Electricity Regulatory Commission on Thursday rejected its request to cancel Power Purchase Agreements (PPAs) of AP Generation Corporation with the distribution companies made during the pre-bifurcation period.

In a notification issued here, the Commission said that it was unable to consider the request since it was not made by the 'parties who filed PPAs before us.'

Earlier, the Southern Regional Load Dispatch Centre has imposed a status quo and directed AP government to maintain the existing power supply system.

The ERC decision comes as a relief to Telangana government which stood to lose 600 MW of power if the PPAs were cancelled and the AP government allowed to utilize power from the plants located under its jurisdiction.

With the Regulatory Commission rejecting the idea of cancellation of PPAs, the AP government would be compelled to follow the procedure being suggested by the regulatory body and also the norms as mandated under the AP Reorganization Act.

Earlier, the AP government had written a letter to the SRLDC at Bengaluru for rescheduling the power supply system. However, its move evoked strong criticism from political parties in Telangana and the Centre also suggested that the present arrangement should be continued, till Union Power Ministry takes a final decision.

Meanwhile, on Thursday, justifying its decision to scrap the PPAs, the AP government requested the SRLDC to supply power accordingly.

In a letter written to SRLDC, Bengaluru, AP SLDC officials argued that as per Schedule XII C (1) of Andhra Pradesh Re-organisation Act, 2014, 'Units of APGENCO shall be divided based on geographical location of power plants.'

According to Schedule XII C (2) of Andhra Pradesh Re-organisation Act, 2014, 'Existing Power Purchase Agreements (PPAs) with respective Discoms shall continue for both ongoing projects and projects under construction.'

The officials said that nowhere in the PPAs the specific allocation of power between Discoms was mentioned. Further, the PPAs were not valid as APERC has not given its approval and Government of Andhra Pradesh directed the APGENCO to withdraw the draft PPAs. Accordingly, the APGENCO has taken steps as directed by the Government, they said.

The officials said that as no PPA was subsisting, APGENCO is under obligation to supply power to APSPDCL and APEPDCL only.

Further, Section 37 of Electricity Act, 2003 says 'the appropriate government may issue directions to the regional load dispatch centres or state load dispatch centres, as the case may be, to take such measures as may be necessary for maintaining smooth and stable transmission and supply of electricity to any region or state,' the officials pointed out.

AP SRLDC officials said that the Government of Andhra Pradesh has directed the SLDC to schedule power to Andhra Pradesh Discoms only and it was duty bound to implement them.

They requested SRLDC to ensure that the schedule submitted by APSLDC was honored so as to avoid operational difficulties in real time grid operations.