Andhra discoms agreements are with SECI not with Adani entities

Hyderabad: The US court filings in Gautam Adani's indictment has said he had offered bribes to government officials in several states, including in Andhra Pradesh to facilitate deals with SECI. However, the YSRCP that was in the government in 2021 when the deals were struck, said there is no direct agreement between AP's distribution companies (DISCOMs) and any other entities, including those belonging to the Adani group.

The party, now in the opposition, emphasised that the allegations made on the state government, when YSRCP was in power, are 'incorrect'. YSRCP also claimed that the benefit of the agreement with SECI was 'immense', saving Rs 3,700 crore per annum for the Andhra exchequer. After coming under intense scrutiny for the PPAs with SECI, YSRCP released the statement on Thursday night.

“It is necessary to mention that SECI is a Government of India enterprise. There is no direct agreement between AP DISCOMs and any other entities including those belonging to the Adani group. Therefore, the allegations made on the State Government, in the light of the indictment are incorrect. Further, there is an express stipulation in the order of the Ministry of Power, Government of India to the effect that the ISTS charges with respect to projects selected under the tender issued by SECI are waived for a period of 25 years. Therefore, the project does not entail any burden on account of ISTS charges. Owing to these reasons, the project is extremely favourable with respect to the interests of the state and procurement of power at such a cheap rate would substantially benefit the State with a saving of Rs. 3,700 crores per annum. As the agreement is for a period of 25 years, the total benefit to the State on account of this agreement would be immense,” said YSRCP in a statement.

Andhra Pradesh distribution utilities supply close to 12,500 MU of free power per annum to the agriculture sector. Government compensates the distribution utilities to the extent of the cost of supply pertaining to that power.

YSRCP said that owing to the policies of the previous governments in the state, PPAs at exorbitant tariffs were executed, unmindful of the impact on the state DISCOMs, the cost of procuring power as a part of cost of supply had increased to nearly Rs. 5.10 per kWh. This was making the subsidy cost very burdensome on the Andhra government. With a view to mitigate this problem, the state government in 2020 proposed to install 10,000 MW of solar capacity in solar parks to be developed.

In this regard, a tender was floated by APGECL in Nov 2020 for development of solar power capacity aggregating to 6,400 MW power, wherein over 24 bids were received with the tariffs in the range of Rs. 2.49 to Rs. 2.58 per kWh. However, the tender encountered several obstacles on legal and regulatory front and therefore, the exercise could not fructify.

“The state government subsequently received an offer from SECI, a Government of India enterprise to supply 7,000 MW of power at the lowest discovered tariff of Rs. 2.49 per kWh including waiver of ISTS charges. SECI, a Government of India owned entity, functioning under the administrative control of Ministry of New and Renewable Energy, Government of India will procure power from projects selected under the Request for Selection (RfS).

In the light of this, the Government of Andhra Pradesh entered into an arrangement to procure power from SECI , to the tune of 7,000 MW at Rs. 2.49 per kWh for 25 year period with 3,000 MW commencing in FY 2024-25, 3,000 MW commencing in FY 2025-26 and 1,000 MW commencing in FY 2026-27 with waiver of the ISTS charges,” said a YSRCP spokesperson.

Power procurement of 7,000 MW was approved by APERC, CERC and the Power Sale Agreement (PSA) was signed on December, 1, 2021 between SECI and AP Discoms.