Andhra govt floats whitepaper on power sector, targets previous YSRCP regime and suggests reforms

The newly-formed Andhra Pradesh government under Chief Minister Chandrababu Naidu on Tuesday floated a whitepaper around its power sector where it discussed its status and raised allegations on its predecessor government under Jagan Mohan Reddy.

As per the whitepaper, there was a phenomenal increase in the power tariff burden among consumers, the debt of state power utilities increased, and there were losses due to inefficient governance.

Total loans of Andhra Pradesh power utilities increased from ₹62,826 crore in 2018-19 to ₹112,422 crore in 2023-24, with an increase of ₹49,596 crore or a 79 per cent increase.

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"The Andhra Pradesh power sector needs three new reforms. I have never seen such destruction of the state in my political career, even though this is my fourth term. We are committed to development and are handling these burdens. We will come up with strategies to resolve all these issues. We are committed to providing uninterrupted electricity supply," the chief minister said, releasing the whitepaper.

"We are committed to providing uninterrupted electricity supply. The quality of electricity should be maintained without hiking true-up charges. I have to go through the agreements done by the previous government. Andhra Pradesh is one of the states to go with green hydrogen," the CM added.

Further, the paper also alleged that investors lost confidence and the brand image of Andhra Pradesh was spoiled.

The average tariff for domestic consumers increased from ₹3.87 per unit to ₹5.63 per unit*, a rise of 45 per cent, during the Reddy government, the whitepaper noted.

"Poor consumers impacted with higher tariff increase of 78- 98 per cent compared to up to 29 per cent for middle-class consumers. Overall, 153 Lakh customers impacted," the whitepaper read.

It also noted that a delay in the commissioning of thermal power plants resulted in a total additional burden of ₹12,818 crore.

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It particularly mentioned the delay in the commissioning of the Polavaram Hydro Electric Project. A contract was awarded on December 6, 2017, with an expected commissioning date of May 2023.

Later, according to the whitepaper, the contract was terminated and the commissioning date was revised to January 2026.

Due to ongoing arbitration, the whitepaper asserted that it led to the expected loss of up to ₹1,500 crore. The impact of price variation was ₹350 crore.

Delay in the commissioning of Polavaram Hydro Electric Project is expected to result in total additional burden of ₹4,737 crore.

In the way forward, it suggested that there was a need to address the legacy losses of ₹1,29,503 crore, there is a need to bring back the investors' confidence and rebuild the brand Andhra Pradesh, ensure there are no power cuts, provide quality and reliable power supply at affordable rates.

"We have introduced Power Sector Reforms 1.0, Power Sector Reforms 2.0 and now we need Power Sector Reforms 3.0 to transform the sector for empowering the society. Hence seeking inputs and support from all stakeholders to strengthen my hands and make AP as Energy Hub of the future," the whitepaper read.