SECI moves to claim Andhra’s dues from central devolution | Mint
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Business News/ Politics / Policy/  SECI moves to claim Andhra’s dues from central devolution
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SECI moves to claim Andhra’s dues from central devolution

The move to collect dues for supplying solar energy may further exacerbate the growing crisis between the Centre and the Andhra Pradesh government
  • The tripartite agreement between the Reserve Bank of India (RBI), the Union government, and the state governments that provides comfort to power producers against payment defaults by state electricity boards has been invoked for the first time
  • Solar Energy Corp. of India‘s move may further exacerbate the growing crisis between the Centre and the Andhra government.Premium
    Solar Energy Corp. of India‘s move may further exacerbate the growing crisis between the Centre and the Andhra government.

    State-run Solar Energy Corporation of India (SECI) is enforcing a tripartite pact to collect 276 crore in dues from the Andhra Pradesh government from the central devolution.

    The move to collect dues for supplying solar energy may further exacerbate the growing crisis between the Centre and the Andhra Pradesh government over the latter’s decision to relook renewable energy contracts.

    According to government documents reviewed by Mint, “SECI has already moved to enforce the tripartite agreement for collecting its dues of around 276 crore for RE (renewable energy) power supplied from the funds that would be devolved to state from Centre."

    The tripartite agreement between the Reserve Bank of India (RBI), the Union government, and the state governments that provides comfort to power producers against payment defaults by state electricity boards has been invoked for the first time, against the backdrop of hard-found compromise reached last month to end the impasse.

    Under the existing tripartite agreement, any state defaulting on dues owed to power companies risks a deduction from its central fund transfers. Andhra Pradesh owes 20,000 crore in unpaid bills to all power generators.

    “During the meetings of the high level committee comprising the Union power secretary, new and renewable energy secretary, the state government’s principal secretary (finance), and its power secretary, this issue was discussed. While it seemed SECI’s dues will be cleared, hardly any significant dues have been paid by the state," said a senior Union government official, on condition of anonymity.

    These overdue payments for supply of solar power by SECI to the Andhra Pradesh government is from the solar park at Kadapa in Andhra Pradesh. SECI has been leading the National Democratic Alliance (NDA) government’s efforts to rejig its energy mix in favour of green energy sources by conducting the solar power bidding process. This has helped the country emerge as a clean energy champion.

    The Andhra Pradesh government led by chief minister Y.S. Jagan Mohan Reddy has, meanwhile, upped the ante by raising doubts on the capability of the committee headed by the Union power secretary to resolve the problem. It has also raised the issue of the Centre’s assistance in times of need and has cautioned that central schemes might be hit in the absence of such help, Mint had reported on Monday.

    Queries emailed to Jatindra Nath Swain, managing director, SECI, and a spokesperson for India’s ministry of new and renewable energy on Sunday night remained unanswered. Andhra Pradesh’s energy secretary N. Srikanth said on Monday that he will seek details regarding queries from Mint. The details were not made available till press time.

    Experts believe that a long-term solution is warranted, given the state of discoms.

    “Cash in the system is generated by efficient distribution and retail supply operations which feeds the sector value chain, including OEMs (original equipment manufacturers). Unless owners of these businesses (state governments) understand that and shape up their utilities or allow for change of ownership, all measures are short term, discrete, piece meal and reactionary in nature," said Sambitosh Mohapatra, partner, power and utilities, at PwC India.

    Andhra Pradesh’s average power demand is 7,500MW with its peak demand touching 11,000MW. The state is home to India’s second-largest installed capacity of clean energy, which accounts for around 10% of the country’s green energy capacity, with investments of around 60,000 crore. The state has 4,092MW of installed wind power projects awarded through feed-in tariffs. Also, the resource-rich state has 3,230MW of solar projects awarded through competitive bidding.

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    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

    ABOUT THE AUTHOR
    Utpal Bhaskar
    "Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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    Published: 11 Dec 2019, 07:57 AM IST
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