Andhra Pradesh Approves Amended PPA for 6.5 MW of Wind Projects

The Andhra Pradesh Electricity Regulatory Commission (APERC) has approved the execution of an amended power purchase agreement (PPA) between Ramagiri Renewable Energy Limited (RREL) and Transmission Corporation of Andhra Pradesh (APTRANSCO).

The PPA in question is for the sale of power from a 6.5 MW wind project in Anantapur district of the state. The commission has directed the two parties to sign an amended PPA within two weeks.

The state body has also asked the generator to pay all the outstanding dues amounting to ₹6.85 million (~$96,126) to the petitioner for the power supplied from May 2018 within a month.

Background


Ramagiri Renewable Energy Limited (formerly IL&FS Wind Farms Limited) had filed a petition claiming that it had entered a PPA with APTRANSCO in August 2001 for sale of power from its 6.5 MW wind power project in Anantapur district of Andhra Pradesh.

After two years, the same PPA was revised due to a change in the name of the petitioner from Infrastructure Leasing and Financial Services Limited to IL&FS Wind Farms Ltd.

Again, after nearly two years, the government of Andhra Pradesh ordered the transfer of supply undertakings and PPAs to the distribution licensees. With this change, the PPA fell under the Southern Power Distribution Company of Andhra Pradesh Ltd (SPDCAL), which was also a respondent in this case.

The project was receiving a tariff of ₹3.37 (~$0.05)/kWh until the expiry of the PPA in November 2015 after which the Andhra Pradesh Power Coordination Committee, a state government entity supporting the distribution companies in the state with power procurement, inter-state and intra-state trading functions, applied to the Commission seeking approval for the extension of the PPA for two years. With the PPA extension, the tariff was revised downward to ₹2.23 (~$0.03)/kWh for the period between November 6, 2015, and November 6, 2017.

Later, the agreement period was again extended for another two years at the same tariff of ₹2.23 (~$0.03)/kWh, entering an amended PPA in October 2017 with SPDCAL.

When Ramagiri Renewable Energy requested for further extension of the PPA on October 23, 2017, it was not considered, and the PPA expired on October 26, 2017, and the project was disconnected.

However, Ramagiri Renewable Energy and SPDCAL, on August 8, 2018, amended the PPA and extended the date of PPA to March 31, 2019, at the same tariff rate of ₹2.23 (~$0.03)/kWh.

In this context, SPDCAL argued that the project was disconnected, and it was not informed to the commission when the project had been reconnected.

So, Ramagiri Renewable Energy has now requested the commission to approve the date of amended to be the date of reconnection (May 14, 2018) for the sale of power generated from the 6.5 MW power project.

It also requested the APERC to direct the DISCOMs to pay the amount of ₹6.85 million (~$96,126) for 3,071,400 units supplied at the rate of ₹2.23 (~$0.03)/kWh from May 14, 2018, to August 8, 2018.

In response to this petition, the Commission has ordered the DISCOM to consider the date of amended PPA to be May 14, 2018, which is the date of reconnection of the project to the grid instead of the date of entering into the agreement, March 31, 2019. The Commission has directed the DISCOM to enter into the amended PPA within two weeks of this order. The Commission has also instructed the DISCOMs to pay the dues of ₹6.85 million (~$96,126) within four weeks of this order.

Andhra Pradesh created ripples in the renewable industry by announcing its intent to revisit and renegotiate PPAs already signed. After a series of petitions, warnings by the central power minister and court cases,  the Andhra Pradesh high court recently stayed the notice issued by the APERC for public hearings to revise solar tariffs.  Also, giving relief to the developers, the Andhra Pradesh High Court at Amravati directed the state DISCOMs to clear the dues of solar and wind developers within four weeks of its order dated December 20, 2019.

Image credit: Chmee2 [CC BY-SA 3.0]