Andhra Pradesh Government Moves High Court Over PPA's Row

The government of Andhra Pradesh on Tuesday moved the High Court over central govt orders asking the state to open Letters of Credit (LCs) to purchase the power from wind and solar power producers by October 15 to ensure timely payments

AP power distribution companies filed a lunch motion petition in the High Court on Tuesday arguing that it is not possible to issue LCs, as they were undergoing a financial crisis.

"The Central government, as a third party, cannot interfere in the contract conditions of the Power Purchase Agreements (PPA). It has no judicial power to put a few Discoms out of the power exchange and short term open access that are governed by the Central Electricity Regulatory Commission (CERC)," the DISCOMS said.

Following this, the court had adjourned the hearing to November 5

Andhra Pradesh Power generating firms are fighting on behalf of hovernment's decision to renegotiate power purchase agreements (PPAs). In the court last month, the power companies were asked to approach the state's Regulatory Commission to raise their objections.

PPA agreements are made between the power purchaser and the company. However, the centre has advised the state not to review on the PPA's as it would affect foreign investments in the renewable energy sector.