The Andhra Pradesh government led by N Chandrababu Naidu, who is known to take quick decisions, is treading cautiously as far as electricity supply from the now controversial Adani Green Energy project is concerned.

The State Cabinet, is understood to have discussed the status of the power supply agreement between the State Discom and the Solar Energy Corporation of India (SECI), in its meeting earlier this month. SECI has signed power purchase agreements with Adani Green, which was scheduled to start power supply next year.

“We are aware of the challenges. As of now no decision on the contract has been communicated,” a source in the know said.

If the State decides to cancel the project, it will end up paying a substantial amount for 25 years – close to ₹2,800 crore annually. However, if it continues with the purchase agreement then the end user, the retail consumers, will have to pay extra 80 paise-₹1 for the power bought. This is because geographical network access component will be applicable now. The contract is to supply an initial 3 GW renewable energy to the State discom, another 3 GW in 2025, and 1 GW in 2026.

Blames Jagan

Meanwhile, politics over electricity continues in Andhra Pradesh with allegations and counter-allegations between the ruling party and opposition. Recently, Andhra Pradesh Energy Minister Gottipati Ravi Kumar took on the former Chief Minister YS Jagan Mohan Reddy alleging that the latter himself has initiated protests against the electricity charges.

He said that in 2019, Andhra Pradesh was a power surplus State. However, Reddy’s government turned it into a power deficit State within five years due to poor decisions and corruption. Further, he stated that the previous regime led by Reddy had cancelled power purchase agreements, threatened solar and wind energy investors, and drove them out of the State, causing the loss of 10,000 MW of renewable energy.

If this was not enough, he said the health of AP Genco was further reuined. The power was purchased at inflated prices—between ₹8 and ₹14 per unit, while it was available at ₹5 per unit. Further, the true-up charges (the gap between the power supply, and billed amount and collection) approved by the Andhra Pradesh Electricity Regulatory Commission (APERC) during Reddy’s tenure have now become a heavy burden on the people. These charges amounted to:

•         ₹3,082 crore for 2021-22

•         ₹6,073 crore for 2022-23

•         ₹9,412 crore for 2023-24