The Hindu : Andhra Pradesh News : Hearing on PPAs put off

Online edition of India's National Newspaper
Tuesday, Apr 12, 2005

Andhra Pradesh

Andhra Pradesh

Hearing on PPAs put off

By Our Special Correspondent

HYDERABAD, APRIL 11. A hearing conducted by the State Electricity Regulatory Commission on the power purchase agreements signed by Andhra Pradesh Transco with four pipeline gas-based projects came to an abrupt end here today.

Advocates representing Vemagiri, Gauthami, Konaseema and GVK Extension which are to add 1,500 MW to the grid capacity, pleaded against the hearing saying that the matter was sub judice citing a public interest litigation (PIL) pending before the High Court filed by A.B. K. Prasad, well-known journalist. Transco and five other petitioners wanted the exercise to continue. The commission chairman, K. Swaminathan, postponed the hearing to April 23.

Review petition

The hearing was held following a review petition filed by Transco some time ago before the commission pleading against certain provisions in the PPAs by which it would have to pay fixed charges to the projects even without using their output once they declared they were ready for operation with costly fuels such as naptha in the event of non-availability of natural gas. The possibility of such an eventuality was seen by Transco in the light of the lack of gas availability as admitted by the GAIL.

After coming to power, the Congress Government, however, achieved an understanding to keep the "alternate fuel clause" in the PPAs in abeyance till December 2006 which meant no payment of fixed charges if costly fuel was used when gas was not available.

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