The Andhra Pradesh Electricity Regulatory Commission (ERC) has accorded conditional approval to the state Power Distribution Companies’ (Discoms) proposal to procure 7,000 MW of solar power offered by the Solar Energy Corporation of India.
However, the ERC made no mention of the rate at which the Discoms could purchase solar power even as a row erupted over SECI’s offer price of Rs 2.49 per kWh (unit).
It permitted the Discoms and the state government to enter into a tripartite power sale agreement, “subject to the determination of tariff by the Appropriate Commission” as per the provisions of the Electricity Act, 2003.
The opposition parties in AP raised questions over the pricing as SECI was offering solar power to other states at a rate as low as Rs 1.99 per kWh.
Amid the opposition clamour, the government said the power purchase from SECI would result in a saving of Rs 2,000 crore per year.
Last month, the state Cabinet cleared the proposal to purchase 7,000 MW of solar power from SECI for 25 years in three phases beginning September 2024.
The Cabinet also approved the move to rename the AP Green Energy Corporation Limited as AP Rural Agriculture Supply Company (Rascom) as the solar purchase purchased will be solely used for 9-hour free supply to the agriculture sector.
About 17,000 million units of power would be supplied free-of-cost to the agriculture sector every year under the scheme.
The AP Discoms estimated that the subsidy support for free power supply to agriculture would increase from Rs 8,900 crore now to around Rs 17,819 crore by 2030-31 as 50,000 new connections were being added every year.
The ERC said it is “advisable to de-risk the Discoms as soon as possible from the burden of agricultural consumption” by ensuring direct payment from the state government through an exclusive payment security mechanism.
This is to ensure that the financial health of the Discoms improves, it said.
“The ERC is of the considered view that procurement of the proposed energy is necessary and in the best interests of the power sector in the state. It is satisfied that the proposed purchase of power will not cause any burden on any consumer category as the cost will be completely borne by the AP government,” the ERC said in its order.
The ERC also laid out a condition that the state government ensure the transmission and distribution network is adequately strengthened to cater to the injection of the proposed power before the commencement of power supply (to the agriculture sector).
Source : PTI
