APTEL Stalls Andhra DISCOM’s Move to Cancel Axis Energy’s Wind PPA

The Andhra commission is scheduled to hear APSPDCL’s petition on August 17, 2019

August 13, 2019


Andhra Pradesh’s decision to withdraw 21 wind power purchase agreements (PPAs) including that of Axis Wind Farms has been stalled by the Appellate Tribunal for Electricity (APTEL).

Andhra Pradesh South Power Distribution Company Limited (APSPDCL) had submitted to the Andhra Pradesh Electricity Regulatory Commission (APERC) that 21 wind PPAs for wind power projects worth 776.9 MW should be canceled.

A portion of the petition said that given the state DISCOMs’ consequent inability to bear the additional financial burden involved in purchasing power from 21 wind developers, it has decided to withdraw the PPAs entered with various wind power projects, including the clients of Suzlon and Axis Energy Ventures. It argued that since the PPAs are not yet approved, it is not enforceable and the APSPDCL is at liberty to withdraw the PPAs. Stating this, the state DISCOMs requested to withdraw the 21 PPAs entered with various wind power projects. The commission is slated to hear the matter on August 17, 20119.

Meanwhile, Axis has requested APTEL to issue an ad-interim stay on further proceedings. The petitioner further stated that it has already invested huge amounts to proceed with the projects. The withdrawal would cause “irreparable injury and loss apart from great financial burden, since bank guarantees of substantial amounts have already been given to nodal agencies,” argued Axis.

APTEL has asked the respondents to send back the notice issued to them with necessary clarifications by August 26, 2019.

In July 2019, Amaravathi High Court had issued a stay order on the implementation of the state DISCOM’s letter seeking a revision in the power purchase agreement for the solar and wind projects. The stay will be in place until August 22, 2019. However, even after the stay order, the state began severely curtailing wind power, which was confirmed to Mercom by wind developers with assets in the state.

Previously, Mercom reported that the nine renewable energy project developers approached the court in the matter: 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).

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