‘No direct agreement between Andhra power distribution companies, Adani Group’: YSRCP on Adani US indictment bribery allegations

The statement detailed the issues related to power procurement at the time: “Andhra Pradesh distribution utilities supply close to 12,500 MU of free power per annum to the agriculture sector. On this front, the government compensates the distribution utilities to the extent of the cost of supply pertaining to that power. Owing to the policies of the previous governments of Andhra Pradesh, Power Purchase Agreements (PPAs) at exorbitant tariffs were executed, unmindful of the impact on the state power distribution companies (DISCOMs), the cost of procuring power as a part of cost of supply had increased to nearly Rs 5.10 per kWh. This was making the subsidy cost very burdensome on AP government.”

“With a view to mitigate this problem, the state government of Andhra Pradesh in 2020 proposed to install 10,000 MW of solar capacity in solar parks to be developed in the state of AP. In this regard, a tender was floated by APGECL (Andhra Pradesh Green Energy Corporation Ltd) in November 2020 for development of solar power capacity aggregating to 6,400 MW power, wherein over 24 bids were received with the tariffs in the range of Rs 2.49 to Rs. 2.58 per kWh. However, the tender encountered several obstacles on legal and regulatory front and therefore, the exercise could not fructify,” the statement said.

It said that the government subsequently received an offer from SECI to supply 7,000 MW of power “at the lowest discovered tariff” of Rs 2.49 per kWh.

“In the light of this, the government of Andhra Pradesh entered into an arrangement to procure power from SECI to the tune of 7,000 MW at Rs. 2.49 per kWh for 25 year period with 3,000 MW commencing in FY 2024-25, 3,000 MW commencing in FY 2025-26 and 1,000 MW commencing in FY 2026-27 with waiver of the ISTS (inter-state transmission system) charges,” the statement said.

Rejecting the allegations, the statement said: “The power procurement of 7,000 MW was approved by APERC (Andhra Pradesh Electricity Regulatory Commission) through its order on November 11, 2021, as per the statement. After the APERC approval was obtained, the power sale agreement (PSA) was signed on December 1, 2021 between SECI and AP Discoms. This was after the CERC (Central Electricity Regulatory Commission) approval as well. It is necessary to mention that SECI is a Government of India enterprise. There is no direct agreement between AP DISCOMs and any other entities including those belonging to the Adani group. Therefore, the allegations made on the State Government, in the light of the indictment are incorrect.”

The statement also said: “…the project is extremely favourable with respect to the interests of the state and procurement of power at such a cheap rate would substantially benefit the state with a saving of Rs 3,700 crore per annum. As the agreement is for a period of 25 years, the total benefit to the state on account of this agreement would be immense.”