More Power Problems in Store for AP?

Central Government seems to be acting stern on YSR Congress Government. The Union Energy Ministry has written a letter to Andhra Pradesh Government to clear all the arrears of Wind and Solar Energy and issue a Letter of Credit to the companies. If at all that is not done, the state will not be allowed to purchase power from Power Exchange India.

The Ministry has imposed a deadline until tomorrow to do this. If letters of credits are given to the companies, they can encash them in 45 days, it will bring a burden of 550 crores to the State. Given that Jagan Mohan Reddy Government is not adhering to PPAs, the government has brought Letters of the Credit system to the Renewable Energy Companies as well.

If at all the ban is imposed on Andhra Pradesh in Power Exchange India, the Power Cuts in the state will become intense. Already, there is a remark in the people that the Power situation has deteriorated under Jagan’s Rule and so, the Chief Minister has to do something about it.

On the other side, Union Finance Minister Nirmala Sitharaman speaking at the India Energy Forum of CERAWeek said, “India will honour energy contractual commitments, investors need not worry”.