It looks like the YSR Congress party government headed by Y S Jagan Mohan Reddy has softened its stand on revising the power purchase agreements signed by the previous Telugu Desam Party government with various solar and wind power producers.
Apparently with pressure mounting from the Centre and funding agencies and also due to court cases, the Jagan government is now saying that there is no plan whatsoever to cancel the PPAs signed with power producers.
“We never said we will cancel the PPAs entered into by the previous government, but we only asked them to come for renegotiation. The government only asked them to substantiate their power production costs. Beyond that, there is no intention of renegotiating the PPAs,” state industries minister Mekapati Gautam Reddy said, at a press conference on Tuesday.
His statement is contrary to the earlier stand taken by the Jagan government which constituted a cabinet sub-committee to renew the PPAs.
The chief minister even declared that those companies which did not fall in line and reduce the power tariff would have to wind up their companies as the government would cancel the PPAs with them. The government even served notices on them for negotiations.
However, the Union power minister and secretary wrote strongly worded letters to Jagan opposing his decision to review the PPAs, while credit rating agencies like Crisil warned of a backlash from investors. Over 40 companies moved the court, while Japan consultate also wrote a letter to Jagan opposing the move.
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