APERC Approves Tripartite Power Sale Agreement for 7 GW Solar Procurement

The Andhra Pradesh Electricity Regulatory Commission (APERC) has granted approval for the Tripartite Power Sale Agreement (PSA) between the Solar Energy Corporation of India (SECI), Andhra Pradesh Power Distribution Companies (APDISCOMs), and the Government of Andhra Pradesh (GoAP). The agreement involves the procurement of 7,000 MW of solar power over 25 years with an annual ceiling of 17,000 million units (MU).

The decision follows the final hearing held on April 10, 2024, where the Commission reviewed the petition submitted by Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL), Eastern Power Distribution Company Limited (APEPDCL), Central Power Distribution Company Limited (APCPDCL), and the GoAP. The petitioners sought approval for the Tripartite PSA signed on December 1, 2021, and its Supplemental Agreement dated December 29, 2023.

The PSA outlines the procurement of solar power in three tranches: 3,000 MW in 2024, 3,000 MW in 2025, and 1,000 MW in 2026. The primary objective of the agreement is to provide nine hours of free daytime electricity to farmers in Andhra Pradesh. 

During the hearing, both the petitioners' counsel, P. Shiva Rao, and the respondent's counsel, Anushree Bandham, presented arguments on the maintainability of the petition. The Commission examined whether it had the jurisdiction to approve the PSA, considering that the Central Electricity Regulatory Commission (CERC) had already adopted the tariff for the project.

The Commission concluded that, under the Electricity Act, 2003, it has the authority to regulate the electricity purchase and procurement process within the state. It was noted that while CERC is responsible for tariff adoption, the APERC has jurisdiction over the approval of the PSA itself. The Commission also emphasised that the agreement would not impose any additional financial burden on consumers, as the cost of power procurement would be fully covered by the GoAP.

The Commission addressed public concerns about the lack of a public hearing for the approval process. It clarified that, since the tariff had already been determined through a transparent competitive bidding process and approved by CERC, no further public consultation was required. Additionally, the Commission noted that the agreement's terms were standard and did not negatively impact any stakeholders.

In its order, the APERC approved the Tripartite PSA and its Supplemental Agreement, subject to the outcome of pending public interest litigations (PIL) before the Andhra Pradesh High Court.