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Rejig of discoms to cause havoc in Andhra Pradesh

The rearrangement of power distributing companies with two districts (Anantapur and Kurnool) being reshuffled as envisaged in the AP Reorganisation Act will cause a huge entanglement of loans, purchases and projects.

Anantapur and Kurnool districts will come under the Southern Discom according to the Reorganisation Bill. The two districts are currently under the Northern Discom.

The Act said that APGenco plants will be divided on geographical basis, but it also said that the existing PPA (Power Purchase Agreements) of individual discoms would continue.

This will cause a lot of managerial problems, say officials of the Electricity Regulatory Commission.

“As a consequence, thermal plants of the APGenco are expected to be split into Andhra Genco and Telangana Genco, whereas hydel plants are expected to be transferred to the respective river boards,” said an official of the APERC.

“As per the State Reorganisation Act, Anantapur and Kurnool districts are to be clubbed with the Southern Discom with effect from the Appointed Date, June 2. Power Purchase Agreements with respective discoms for ongoing projects and projects under construction are expected to cause a lot of havoc, in particular with respect to PPAs with APGenco,” the officer said.

Also, it is implied that Genco plants located in Telangana and in Andhra Pradesh will have to serve discoms in both states.

Once these become inter-state plants (serving licensees in more than one state), then the electricity regulation commissions will have no jurisdiction to determine the tariff.

The tariff will then be determined by the Central Regulatory Commission. Gencos (both in AP and Telangana) will face a difficult time in getting clarifications.

“This will increase the administrative costs and burden to consumers in both states. Ideally, the state that owns the assets should be entitled to the disposition of its assets, including selling the power generated by its plants,” the official said.

APGenco assets are state-owned, so it would be ideal if power allocation from its stations is limited to the respective discoms in the successor states,” added the official.

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