PSPCL has sought a discount from solar power developers for the electricity supplied
NEW DELHI : The Punjab government led by chief minister Amarinder Singh of the Congress wants to renegotiate clean energy contracts. The Punjab State Power Corp. Ltd (PSPCL) has sought a discount from 1 July, from solar power developers for electricity supplied, because of low interest rates and a financial crunch exacerbated by the covid-19 pandemic, said two people aware of the development.
The development comes amid investor criticism over the attempt by Andhra Pradesh chief minister Y.S. Jagan Mohan Reddy to renegotiate clean energy tariffs. The move by Andhra Pradesh led to the central government pitching to set up an Electricity Contract Enforcement Authority to ensure that conditions in power purchase agreements (PPAs) are followed, through the proposed draft amendments to the Electricity Act 2003.
PSPCL has signed two PPAs with Prayatna Developers Pvt. Ltd (PDPL), a special purpose vehicle promoted by billionaire Gautam Adani’s Adani Power Ltd. “We have written to major solar power and co-generation plant developers that supply electricity to the state. This is not specific to any one developer,” said a senior state government official, requesting anonymity.
Emailed queries to PSPCL and Adani Group spokespersons on Sunday remained answered till press time.
“The pandemic situation is affecting the viability of the power sector and as such concerted efforts are required from all stakeholders for sustenance. Keeping in view the above, the low rates of interest prevailing presently and the present financial crunch being faced by PSPCL, it is hereby requested to give at least 10% discount on tariff for energy to be billed w.e.f. 01.07.2020,” PSPCL wrote to PDPL on 29 June. It was reviewed by Mint.
On 26 March, Mint had reported that the lockdown is set to worsen the precarious financial situation of discoms, as electricity demand load shifted to homes, resulting in lower realizations.
Revisiting PPAs could hurt India’s ability to attract investments and also impact the perception about the sanctity of legal contracts. Mounting dues to generators could also dent its image as a clean energy champion. The electricity tariff for the PDPL contracts was determined on the basis of interest rates on loan capital/working capital at 13-13.5%, while now the interest rates are considerably down, PSPCL’s communication said.
Source: livemint
