Andhra Pradesh distribution utilities supply close to 12,500 MU of free power per annum to agriculture sector. On this front, the Government compensates the distribution utilities to the extent of the cost of supply pertaining to that power. Owing to the policies of the previous Governments in the State of Andhra Pradesh, PPAs at exorbitant tariffs were executed, unmindful of the impact on the State DISCOMs, the cost of procuring power as a part of cost of supply had increased to nearly Rs. 5.10 per kWh. This was making the subsidy cost very burdensome on AP Government. With a view to mitigate this problem, the State Government of Andhra Pradesh in 2020 proposed to install 10,000 MW of solar capacity in solar parks to be developed in the state of AP. In this regard, a tender was floated by APGECL in Nov 2020 for development of solar power capacity aggregating to 6,400 MW power, wherein over 24 bids were received with the tariffs in the range of Rs. 2.49 to Rs. 2.58 per kWh. However, the tender encountered several obstacles on legal and regulatory front and therefore, the exercise could not fructify.
The State Government subsequently received an offer from SECI, a Government of India enterprise to supply 7,000 MW of power at the lowest discovered tariff of Rs. 2.49 per kWh including waiver of ISTS charges. SECI, a Government of India owned entity, functioning under the administrative control of Ministry of New and Renewable Energy, Government of India will procure power from projects selected under the Request for Selection (RfS) issued by RfS No. SECI/C&P/RfS/2GWMANUFACTURING/P-3/R1/062019 dated 25.06.2019.
In the light of this, the Government of Andhra Pradesh entered into an arrangement to procure power from SECI (Solar Energy Corporation of India), to the tune of 7,000 MW at Rs. 2.49 per kWh for 25 year period with 3,000 MW commencing in FY 2024-25, 3,000 MW commencing in FY 2025-26 and 1,000 MW commencing in FY 2026-27 with waiver of the ISTS charges
It is worth mentioning that, the power procurement of 7,000 MW was approved by Hon’ble APERC vide its order dated 11-Nov-2021. After the APERC approval was obtained, the Power Sale Agreement (PSA) was signed on 1-Dec-2021 between SECI and AP Discoms. This was after the CERC approval as well. It is necessary to mention that SECI is a Government of India enterprise. There is no direct agreement between AP DISCOMs and any other entities including those belonging to the Adani group. Therefore, the allegations made on the State Government, in the light of the indictment are incorrect.
Further, there is an express stipulation in the order of Ministry of Power, Government of India to the effect that the ISTS charges with respect to projects selected under the tender issued by RfS No. SECI/C&P/RfS/2GWMANUFACTURING/P-3/R1/062019 dated 25.06.2019 are waived for a period of 25 years. Therefore, the project does not entail any burden on account of ISTS charges. Owing to these reasons, the project is extremely favourable with respect to the interests of the State and procurement of power at such cheap rate would substantially benefit the State with a saving of Rs. 3,700 crores per annum. As the agreement is for a period of 25 years, the total benefit to the State on account of this agreement would be immense.
YSR Congress Party Central Office
Tadepalli
Guntur
MLC Lella Appi Reddy, submitted a formal letter to the Deputy Secretary of the GAD 
