Many industry members are also facing revenue losses due to certain arbitrary decisions being taken by the AP DISCOM, CII said.
The Confederation of Indian Industry (CII) has written to the Centre, asking it to put on hold any further disbursement to Andhra Pradesh DISCOMs under the recently announced DISCOM liquidity scheme. In a letter sent to Power Minister RK Singh, CII said: “Many of our industry members have still not received a substantial portion of the payments pending to them by the Andhra Pradesh DISCOMs from the first tranche. In addition to this, many of our industry members are facing revenue losses due to certain arbitrary decisions being taken by the AP DISCOM.”
CII said in the letter, “We would like to draw your attention that despite paying the partial tariff, Andhra Pradesh DISCOMs have made unexplained deductions in the payment even from the interim reduced tariff. Also, arbitrary deductions have been made by AP DISCOMs over the last 3 years, assuming certain maximum Capacity Utilization Factor (CUF) for wind projects, disallowing generation from DC overloaded capacity for solar projects and deduction of an amount equivalent to Generation Based Incentives till August 2018. All of which are not legitimate and have no legal grounds.”
The first tranche refers to the ₹45,000-crore liquidity infusion which the Indian government had announced in May to help DISCOMs pay off their dues. Along with piling over the last few years, the dues got accentuated due to the Covid-19 pandemic as industries and factories, who contribute bulk of the income, had shut their operations.
These deductions are estimated at around ₹1,000 crore, CII said, adding, “While the overall deductions vary from one IPP to another, our preliminary estimates indicate such deductions amount to more than ₹1,000 crore and are immediately payable.”
CII also complained about the Andhra Pradesh State Load Dispatch Centre (APSLDC) and Transmission Corporation of Andhra Pradesh (APTRANSCO) resorting to excessive illegal curtailment of electricity, which resulted in huge generation and revenue losses for the renewable companies in the State. The YS Jagan Mohan Reddy government, after coming to power, terminated solar and wind power PPAs initiated by N Chandrababu Naidu government. The revoking of PPAs by the AP government also led to the matter getting dragged into the AP High Court.
CII said the holding back of liquidity infusion by the Centre would ensure financial sustainability of the RE generators in Andhra Pradesh and would also provide a strong signal in support of sanctity of contract. The National Solar Energy Federation of India (NSEFI) wrote to Singh last week for Centre’s intervention in an effort to seek early decision on the Power Purchase Agreement (PPA) dispute with Andhra Pradesh. While the Reddy government’s intent was to reduce the high PPA tariffs, the move has put 5.2GW of installed wind and solar power capacity, with combined debt of ₹21,000 crore, at the risk of a default.
