The State government has decided to negotiate with energy generating companies such as NTPC and other gas-based power plants on reducing the time frame of the PPA (Power Purchase Agreement) from the existing 25 years to 5-10 years.
Chairman of the Andhra Pradesh Electricity Regulatory Commission (APERC) Justice G. Bhavani Prasad told reporters here on Tuesday that in the present time frame the cost of power might come down due to various technological advancements, but because of the long agreement period the Discoms had been incurring losses by paying more to the energy suppliers.
“While the cost of producing power has come down on the one hand, the burden on the Discoms has increased due to various consumer beneficial schemes such as free power to the agriculture sector and subsidies to certain sections of the consumers. The Discoms continue to pay the old rate despite energy becoming cheaper,” said Mr. Bhavani Prasad. “Authorities concerned have been approached and a favourable reply is awaited,” he said.
UDAY
Because of the higher PPA rate and lower power tariff, both the SPDCL and EPDCL had an accumulated debt of Rs.11,000 crore. While the EPDCL had a debt of Rs. 3,300 crore, the SPDCL had Rs. 7,700 crore. The government agreed to take over the accumulated debt of both the Discoms, which would reduce the interest burden on the Discoms by Rs. 330 crore annually under the Ujwal Discom Assurance Yojana (UDAY). Earlier, Mr. Bhavani Prasad met employees of the EPDCL, who brought to his notice the problem of staff shortage by 20 per cent. It was affecting work, especially in the rural and Agency areas, they said.
The APERC Chairman said that the issue would be taken up with the government.
Chairman and Managing Director of APEPDCL M.M. Nayak and CEO of State Energy Conservation Mission Chandrasekhar Reddy were present.
Discoms are incurring losses because of longer agreement period, says APERC Chairman
