Telangana government is mulling over the cancellation of old Power Purchase Agreements (PPAs) which are proving to be a burden to the state in future. Experts say that the PPAs are inked in such a way that they benefit Telangana in the next 2 years but AP will get cheaper power for 20 years if the PPAs stand.
Power generation is very cheap in Telangana and costly in AP. Experts warn that if Telangana accept the current PPAs, they will have to shell out hundreds of crores more for the next decade. So the experts say that it is better to support the AP government’s line on cancelling the PPAs.
However Telangana government is keen to continue the PPAs so as to overcome the power crisis. But experts warn the government not to put the long term benefits at stake for temporary gains. Telangana state had pinned high hopes on three upcoming projects – Bhoopalapally (600 MW), Singareni-Jaipur (1,200 MW) and KTPS (800 MW) which are expected to start production before October 2016
