AP plans 4,000 MU power purchase from SECI for agriculture in 2025

Amaravati: Andhra Pradesh power distribution companies have decided to procure over 4,000 million units (MU) of power from SECI out of the total agreed 17,000 MU for the agricultural sector for the next fiscal, as per the latest filing by these companies with the AP Electricity Regulatory Commission.

The move comes weeks after the Solar Energy Corporation of India (SECI) agreement with Andhra discoms became controversial after the US charged Adani Group chairman Gautam Adani in a years-long scheme to allegedly pay USD 250 million bribe to Indian officials including those from Andhra, in exchange for favourable solar power contracts in 2021 when the YSRCP was in power. The allegation has been refuted by the Indian conglomerate.

The opposition YSRCP has also dismissed the charges.

According to the filings, Aggregate Revenue Requirement and Tariff Proposal for the Retail Supply Business for FY 2025-26 by Southern Power Distribution Company of AP Ltd (SPDCL), Eastern Power Distribution Company Of Andhra Pradesh Ltd and Andhra Pradesh Central Power Distribution Corporation Ltd (CPDCL), on November 30, the utilities informed the APERC that they intend to purchase power on behalf of AP Rural Agriculture Power Ltd (APRAPL).

The state government had earlier established APRAPL to channelise the solar power procured from SECI for the purpose of free supply to agriculture consumers. The entity is in the process of obtaining a license and fulfilling the other establishment activities.

Subsequent for full operationalising, the power sale agreement (PSA) will be transferred from AP DISCOMs to APRAPL for supply of power to agricultural consumers.

According to the filings, all three discoms have proposed to purchase 4191 million units during the next financial year.

AP Energy department officials were not available for comment.

Earlier, refuting the bribery allegations, YSR Congress party had said the agreement was between state government, discoms and SECI which is a central government organisation and that there was no third party involvement.

Former Chief Minister of AP YS Jagan Mohan Reddy defended the SECI agreement and said that with it the state would save over Rs 1 lakh crore during the next 25 years.

On November 22, CM Chandrababu Naidu informed the state Assembly that the government was in possession of US "chargesheets" related to the alleged bribery scam involving the previous regime and Adani Group, and "promised" to act on those irregularities after 'studying' them.

As per the terms of the PSA, 3000 MW power is to be supplied from October this year in the first phase, another 3000 MW from October 2025 in the second and a balance 1000 MW from October 2026 during the third phase, totaling 17,000 MU.

However, due to a delay in completion of transmission elements by the Central Transmission Utility of India Limited, SECI has informed that the supply of 1000 MW will begin from January 15, 2025 onwards, 3000 MW in 2025-26 and supply of balance 3000 MW in 2026-27, the discoms said in their filings.

Seeking to supply free power to the farming community on sustained basis and reduce the power procurement cost and subsidy burden on the state government, the three AP discoms entered into the agreement with SECI on December 1, 2021 for procurement of 7000 MW in three tranches at Rs 2.49 per unit which was approved by the APERC.

The cost of procurement under this PSA is to be borne by the state government, which is also a party signatory in the PSA. The solar power developers under the subject PSA are setting up the plants in Rajasthan and Gujarat, the filings added.