AP-T war over power

• AP moves to scrap PPAs
  
• T retaliates by threatening to cut off power to AP offices in Hyderabad
  
• Centre says AP can’t scrap PPAs

• Telangana may lose 600 mw power immediately as a result
  
• It will also lose another 800 mw from Krishnapatnam in future
  
• T govt says under AP Reorganisation Act, AP has no such right
  
• No authority to APERC either to give nod to AP govt request
  
• CM Chandrasekhar Rao seeks Central govt intervention

Hyderabad: Pulling curtains down on the controversy over the power purchase agreements (PPAs), the Union government on Wednesday told the Government of Andhra Pradesh that it would not be possible to cancel the PPAs.

Telangana Chief Minister K Chandrasekhar Rao spoke to the Union Energy Minister Piyush Goyal over phone on the adverse impact on Telangana by the AP government’s move to scrap PPAs with APGenco. Later, the Chief Secretary of Telangana, Rajeev Sharma, also wrote to the Union Ministry of Energy. Following this, the Union government told the AP government that it would have to abide by the AP State Reorganisation Act and strictly follow it.

The two neighboring states of Andhra Pradesh and Telangana are locked in a battle over the issue of cancellation of PPAs that were entered into when the State was united. The Government of Andhra Pradesh had on Tuesday decided to scrap the agreements. Sharply reacting to this move, the government of Telangana said that it would take all necessary measures to see that the PPAs were not cancelled.

Telangana Chief Minister K Chandrasekhar Rao on Wednesday held an emergency meeting with the officials of the power utilities and directed the officials to write to the Centre seeking its intervention. The Telangana government says if the PPAs are cancelled, the T state will immediately lose 600 MW of power and another 800 MW once generation begins at Krishnapatnam thermal power project which is under construction.

The Andhra Pradesh decision to cancel power purchase agreements (PPAs) has evoked a sharp reaction from Telangana, which on Wednesday threatened to hit back in other sectors. Irrigation Minister T Harish Rao even indirectly threatened to cut electricity to houses of Andhra Pradesh Chief Minister, Ministers, Secretariat and Assembly in Hyderabad, which is the common capital of the two states. Rao termed the decision of the Andhra Pradesh government unilateral and alleged that it is a violation of the Andhra Pradesh Reorganisation Act.

Harish Rao said tariff was decided on the basis of the PPAs. "Hyderabad is a common capital. Your institutions like Secretariat and Assembly have to function here. Don't you require electricity to your houses?” he asked the Andhra Pradesh government. "If you go ahead with this, then people of Telangana may have to think of alternatives in many sectors," he said.

It all began with the APGENCO , an official power generation agency of the AP government, writing a letter on Tuesday to the APERC (AP Electricity Regulatory Commission) requesting it to cancel all the agreements that were entered into by the power utilities with the Genco when the state was united.

When KCR sought a report from the officials over the impact of such a proposal, he was told that Telangana would face severe power crisis if the PPAs were scrapped. The DISCOMS in Telangana APCPDCL (AP Central Power Distribution Company Limited) and APNPDCL (Northern Power Distribution Company Limited) have entered into agreements with NTPP ( Narla Tata Rao Power Project) in Vijayawada, Rayalaseema and Simhadri Thermal projects in Kadapa and Visakhapatnam, Nagarjuna Sagar and Srisailam hydel projects for the supply of power. If the PPAs are cancelled, Telangana state would instantly be deprived of 600 MW power.

What was worrying the T government more is that any such measure could create problems for the new state as power shortage would adversely affect the prospects of attracting new industries. Even the IT industries would be affected. The Telangana officials argue that there was no need to be unduly worried over the issue as APERC had not approved the PPAs and hence it did not have the right to cancel the PPAs. Another important aspect the T officials pointed out was that under section 92 of the AP Reorganisation Act, 2014, all the PPAs entered by the Discoms should be continued till the agreement period was completed. The Successor state of AP has no right to alter the agreements without the consent of the new state government. The AP officials claim that they too would take up the issue with the Centre and convince it on the need to cancel the PPAs. They say that AP Chief Minister N Chandrababu Naidu would take up the issue with Union Energy Minister Piyush Goyal during his visit to New Delhi on June 25.