The Andhra Pradesh high court on Thursday stayed the state government’s July 1 order seeking renegotiation of all renewable energy power supply contracts.
New Delhi : The Andhra Pradesh government has no right to issue directions to state power distribution companies and the state’s directive to renewable energy plants to lower tariffs is against the Electricity Act, said law firm J Sagar Associates that represented power companies in high court against the order.
The Andhra Pradesh high court on Thursday stayed the state government’s July 1 order seeking renegotiation of all renewable energy power supply contracts. The order has been stayed for four weeks and the next date for hearing has been fixed at August 22.
“Only the Regulatory Commission can issue directions to discoms. Therefore, there was no legal basis for the State Government to prejudge the issue and direct reduction in tariff across the board,” J Sagar joint managing partner Amit Kapur said in a statement.
The stated objective of the Electricity Act is to distance and reduce interference of the government in functioning of discoms. Under the Electricity Act, power of the state government to issue directions is limited to generating companies.
The actions of the state government were not only contrary to the Act but also Supreme Court’s judgment that renewable energy power purchase agreements can only be reopened to incentivise renewable projects.
The high court has correctly stayed the government decisions. This is a much needed relief since huge investment in the renewable space was under a cloud, he said.