The Central Electricity Regulatory Commission (CERC) has directed Andhra Pradesh Southern Power Distribution Company (APSPDCL) and Telangana Southern Power Distribution Company (TSSPDCL) to pay the outstanding power purchase dues from August 2011 to December 2012, along with 10% interest, to a wind power project developer.

The payment liability is to be shared between APSPDCL and TSSPDCL, based on a consumption-based allocation formula. APSPDCL will bear 17.45% of the liability, while the remaining amount is the responsibility of TSSPDCL.

Background

Solitaire Powertech is a wind power generator operating a 2 MW capacity wind project in Anantapur District since August 30, 1995. Initially, the company used the generated power for its captive consumption after paying wheeling charges. Later, it entered into a power purchase agreement (PPA) with the erstwhile Andhra Pradesh Central Power Distribution Company (APCPDCL).

From April 2004, Andhra Pradesh Electricity Regulatory Commission (APERC) set a tariff of ₹3.37 (~$0.039)/kWh. Until June 2011, the Andhra Pradesh State Power Distribution Company paid the monthly invoices in full. However, starting in July 2011, the utility began withholding 50% of the billed amount, citing a pending revision of the tariff. The petitioner issued several letters requesting full payment, which were either ignored or deferred with advice to approach the regulatory Commission.

APERC, in an interim order, permitted the distribution licensee to pay only ₹1.69 (~$0.020)/kWh. This order was challenged before the Appellate Tribunal for Electricity, which set aside the interim order on August 12, 2013. APTEL directed the power distribution companies (DISCOMs) to continue paying ₹3.37 (~$(~$0.039)/kWh until the tariff was finally determined.

The DISCOMs resumed full payments from December 2012, but did not clear the 50% withheld dues for the previous period or pay interest for delays in payments made thereafter.

Meanwhile, the bifurcation of Andhra Pradesh into two states created further confusion over which entity was responsible for the outstanding dues. The petitioner filed a petition with APERC to resolve the dispute, which remained pending. Based on a High Court directive and considering the interstate nature of the issue after bifurcation, the matter was transferred to CERC.

The current petition sought full payment of pending dues from August 2011 to December 2012, interest on delayed payments from January to October 2013, and reimbursement of ₹109,624 (~$1,274) deducted towards maintenance charges already paid to Transmission Corporation of Andhra Pradesh (APTRANSCO).

TSSPDCL and its coordination committee argued that the project was located in APSPDCL’s territory and that all electricity generated was used within Andhra Pradesh. Therefore, the liability lay solely with APSPDCL. They cited provisions from the Andhra Pradesh Reorganisation Act to support their claim that liabilities followed territorial jurisdiction. TSSPDCL stated that it had neither any financial obligation nor derived any benefit from the PPA post-bifurcation. They also argued that the petitioner had not submitted proof of payment for the maintenance charges claimed.

In contrast, APSPDCL and its affiliates argued that the petitioner had filed a fresh petition instead of continuing the previous one, which was legally questionable. They further pointed out claim that any liabilities prior to the bifurcation, even for projects now under APSPDCL, remained the responsibility of the erstwhile APCPDCL, now TSSPDCL.

Commission’s Analysis

The Commission analyzed the structure of power sector reforms in undivided Andhra Pradesh, which led to the unbundling of the power sector and the transfer of power purchase responsibilities from APTRANSCO to the DISCOMs. The PPA signed in 2002 between Solitaire Powertech and APTRANSCO was eventually assigned to APCPDCL. The APERC orders, dated March 20, 2004, fixed the tariff at ₹3.37 (~$0.039)/kWh, effective from April 1, 2004. The Commission also noted that the PPA obligated the purchasing utility to pay this tariff and imposed a 10% annual interest rate on delayed payments.

The Commission observed that starting in July 2011, the petitioner received only 50% of the invoiced amount, based on an interim APERC order that APTEL later overturned. The petitioner was thus entitled to recover the unpaid dues along with interest.

The regulator examined the legal impact of the bifurcation. These documents clarified that although the districts of Anantapur and Kurnool were reassigned to APSPDCL, liabilities about the pre-bifurcation period were to be reimbursed by TSSPDCL.

Based on the state’s reorganization framework, the Commission ruled that 17.45% of the liability would be borne by APSPDCL, based on historical power consumption in the reassigned districts, and TSSPDCL would bear the remaining portion. This approach aligned with the method prescribed for apportioning assets and liabilities between the two states.

Regarding the deduction of ₹109,624 (~$1,274) for maintenance charges, the Commission noted that the petitioner had submitted bank proof of having already paid the revised amount of ₹146,795 (~$1,706) to APTRANSCO. While the actual receipts were not on record, the petitioner cited official correspondence and acknowledgments that supported the claim.

The Commission allowed the petitioner to resubmit documentation to APSPDCL or TSSPDCL for verification, and upon satisfaction, the amount is to be reimbursed with interest as per the PPA.

Telangana DISCOMs owed power generators ₹59.08 billion (~$689.87 million) in total dues for the June 2025 monthly billing cycle, while Andhra Pradesh DISCOMs owed ₹58.87 billion (~$687.46 million).

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