Power Purchase Agreements row turns complex, may hit expansion plans

Hyderabad: While the PPA issue has taken political colours, the multiple agencies and rules involved has complicated the matter further. Now the Power System Operation Corporation (POSOCO), the highest authority controlling grid operations, has written a letter to the AP government seeking clarification on the PPA cancellation move “to take a decision on the issue.”

Moreover, under present circumstances there is a move within the APERC to dissolve the commission, which will add to the problem. Also, as there are conflicting views on the Telangana side about the impact of the PPAs being cancelled, the issue will make co-ordination difficult between the two sides in future. Yet another letter has been shot off by APGenco to APERC and the four discoms asking for cancellation of the PPAs.

The new PPA proposals have been prepared by APGenco. At present, both the states are fighting over the validity of the PPAs which have not been signed by the commission but once the commission is dissolved, it will be a matter that can drag in courts for decades together.

Also as both governments are not willing to budge an inch, the issue will delay capacity addition on both sides. As learnt from highly placed sources, the APERC which has six months jurisdiction to operate as a common regulatory commission for both states, might be dissolved before the period ends.

Moreover, the complexity of the issues is increasing manifold with each passing day as now POSOCO has asked for clarification from the AP government, indicating that it will be taking a final decision. However, official sources say that SRLC (Southern Region Load Dispatch Centre), CERC (Central Electricity Regulatory Commission), POSOCO (Power System Operation Corporation) and Ministry of Power might all be involved and the APERC in fact has no locus standi on the issue any more.

Meanwhile, APERC too has been issuing advisories and a directive against dissolving the PPAs. While the only way forward could be all the four discoms coming together and asking for dissolving the PPAs which is not being accepted due to the quantum of power (460 MW) being lost by Telangana. In fact the issue will soon land in the High Court.

"The APERC has no business to get involved as it is between two states and therefore it falls in the court of CERC. APERC is also likely to be dissolved as there is already some move on that front. However, the biggest problem will be in future development as political moves will hamper growth plans on either side," a senior official said.