The Andhra Pradesh (A.P.) government is facing a contempt petition in the High Court (HC) for not following the order of a single judge to pay dues and future bills to Independent Wind Power Producers (IWPPs) at the rate of ₹4.83 per kWh in compliance with the Power Purchase Agreements (PPA) entered by the Southern Power Distribution Company Limited (SPDCL).
The DISCOM recently suffered a setback as the HC turned down its plea to permit it to pay at ₹2.43-a-kWh and its action of not paying the dues which, according to Indian Wind Power Association (IWPA) president K.R. Nair, amounts to a staggering ₹20,000 crore including principal and late payment surcharges, attracted contempt proceedings.
The payment was to be made within six weeks from the date of the HC order issued on March 15, 2022.
In a virtual interaction with The Hindu, Mr. Nair said the HC ordered that SPDCL should pay to the IWPPs for the electricity sold by them over the last four years at mutually agreed upon tariffs.
He observed that the payments were illegally withheld by SPDCL apparently on the pretext that the State government owed huge sums to it towards the power purchased.
The consequence is IPPs are on the verge of collapse as their ability to produce power has been going down due to paucity of funds.
Mr. Nair, who is a Director of Emergya Wind Turbines Pvt. Ltd., observed that the IPPs’ trust in the State government is shaken as it defied the HC order and there is no certainty when the debt would be cleared.
Sharad Saluja, Director of Sterling Agro Industries Limited which had diversified into wind power generation, said the AP government sought some more time to pay its dues but then the late payment itself would cost it a fortune.
Nevertheless, the State has to face contempt of court having failed to abide by its order which came after a three year-long battle against the State government’s unprecedented decision to review the PPAs. This move to renegotiate the tariffs severely dented India’s image in the global markets, he asserted.
