Union power minister RK Singh has been critical of the AP government’s order which he feared could set a precedent and besmirch the sanctity of PPAs.

Meanwhile, the discoms will pay the reduced price of Rs 2.432.44/unit to the renewable units.

The Andhra Pradesh High Court has struck down the controversial July 1 order by the state government asking a high-level committee to renegotiate the state’s power purchase agreements (PPAs) with renewable power producers, terming it illegal. The court has, however, asked the state electricity regulator APERC to decide on the matter within six weeks. Meanwhile, the discoms will pay the reduced price of Rs 2.432.44/unit to the renewable units.

While the Jagan Mohan Reddy government’s intent was to revise the ‘high’ PPA tariffs set during the previous regime downwards, the move had put 5.2GW of installed wind and solar power capacity, with combined debt of Rs 21,000 crore, at risk of default. Union power minister RK Singh has been critical of the AP government’s order which he feared could set a precedent and besmirch the sanctity of PPAs.

A senior industry official told FE on conditions of anonymity said: “Our prayers that government has no jurisdiction over tariff renegotiation and disconnect our power plants for which tariffs were decided under competitive bidding was accepted by the court. The court quashed the government order to set up a renegotiation committee. Also, where they had disconnected our power plants, these were termed illegal. The court has directed the state government to re-connect the power plants.”

However, the state government said in a statement, “The HC dismissed the argument of power companies that the government cannot review PPAs and justified the government argument of going to the APERC for review of the PPAs.”