Andhra High Court Imposes Stay Order on State’s Move to Reduce Solar & Wind Tariffs

Stay order imposed until August 22, 2019, following the nine writ petitions filed by developers


Andhra Pradesh Southern Power Distribution Company’s (APSPDCL) decision to revise solar and wind tariffs have been dealt another blow. In a significant order that reviewed writ petitions by nine developers, the Amaravathi High Court has put a stay order on the implementation of the state DISCOM’s letter seeking a revision in the power purchase agreement (PPA) for the solar PV and wind projects.

The stay will be in place until August 22, 2019, after which the court will hear the matter. The written court order is likely to be published and made available later in the day.

As reported previously by Mercom, these nine renewable energy project developers that approached the court are: ReNew Power, Azure Power, ACME Solar, Axis Wind Farms, Khandke Wind Energy, Vena Energy Power, Ecoren Energy, Vayu Urja Bharat and Waneep Solar (special purpose vehicles of Hero Future Energies).

This is the second stay order on the implementation of this letter issued by the state DISCOM which renewable developers have termed as ‘draconian.’

Recently, on project developer Greenko’s request, the Appellate Tribunal for Electricity (APTEL) also put a stay order on the implementation of APSPDCL’s letter seeking a revision in the PPA for a solar project executed by SEI Green Flash Private Limited, SEI Aroshi, and SEI Rain Coke, which are SPVs of Greenko.

With this development, it has become clear that the developers and owners of solar and wind projects will not back down from claiming what is lawfully theirs. After APSPDCL wrote to the Solar Energy Corporation of India (SECI) and the National Thermal Power Corporation (NTPC) asking for a revision of tariff in the PPA and PSA to ₹2.44 (~$0.036)/kWh, they refused to comply as well.

These letters come on the heels of state’s new chief minister Jaganmohan Reddy’s newly-formed committee to deliberate and bring down the costs in all the high-priced Power Purchase Agreements for wind and solar power projects signed during the term of the previous Chandrababu Naidu-led government, alleging corruption.

Following the state’s surprise move, the Power Minister wrote to the chief minister asking him to exercise restraint in the matter so as to not hurt investor interests in the state. However, the state has gone ahead with its decision, making the developers seek legal support.

Commenting on the developments in Andhra, Raj Prabhu, the CEO of Mercom Capital Group, recently predicted that this entire mess would end up in the courts unless the Andhra government took the advice of MNRE and the Power Minister to not go ahead with tariff renegotiations.

“Now we wait to see if the case is resolved in the high court or if this goes all the way to the Supreme Court. This is one of the most consequential legal cases that the renewable energy industry in India has faced to date. The result will have a wide-ranging impact and decide if the contracts are sacrosanct in India and clear the clouds of uncertainty for the investment community once and for all,”  commented Prabhu.

Image credit: EDF Renouvelables