The Adani Enterprises logo atop a building.
Credit: Reuters File Photo
Hyderabad: The power purchase by the Andhra Pradesh government from the Solar Energy Corporation of India (SECI), a government of India entity, has become a focal point of controversy surrounding the indictment of the Adani Group by a US court on bribery charges.
In December 2021, the Andhra Pradesh discoms, under the then YSRCP government, entered into a PSA with SECI to purchase approximately 7000 MW of solar power, making it the largest such agreement among other states. The US court filings had shown that Gautam Adani had met a 'high-ranking' official of the Andhra Pradesh government and offered a bribe of Rs 1,750 crore for facilitating the discoms to purchase SECI power.
The then YSRCP government aimed to supply power procured from SECI to 18.7 lakh farmers under its 'Free Power' scheme. The opposition raised the issue in 2021, shortly after entering a power purchase agreement with SECI.
The YSRCP government strongly defended its decision, stating that procuring solar power from SECI would be more affordable for providing free agricultural power for nine hours during the day over the next 25 years.
Documents from the US court indicated that Gautam Adani had offered Rs 1750 crore to a high-ranking official in Andhra Pradesh regarding this SECI power deal.
“Foreign Official #1” was a citizen of India, and from approximately May 2019 through June 2024, he served as a high-ranking government official of Andhra Pradesh. In addition, the defendant Gautam S. Adani personally met with “Foreign Official #1” in Andhra Pradesh to advance the execution of a PSA between SECI and Andhra Pradesh’s state electricity distribution companies, including on or about August 7, 2021, on or about September 12, 2021, and on or about November 20, 2021,” read the US court filings.
While SECI had initially proposed supplying 9,000 MW of power at Rs 2.49 per kilowatt to Andhra Pradesh under its manufacturing-linked solar scheme, YSRCP government agreed to purchase 7,000mw.
Initially, the then government planned to establish a solar power project of 10,000 MW through AP Green Energy Corporation Limited (GECL) to get power at Rs 2.49 per unit for the next 25 years to supply to farmers.
However, as SECI offered to provide the power at the same cost under its manufacturing-linked initiative starting in 2024, the then state government gave the go-ahead to meet the demand of 18.37 lakh farmers.
The then state energy secretary, Nagulapalli Srikant, in 2021 said that procuring power from SECI was far more beneficial than other available options, as the government was at that time purchasing power at Rs 4.36 per unit and providing it to 18.37 lakh farmers free of cost.
The tariffs proposed by SECI were the lowest in the country, and the transactions would be transparent as it is a Central Public Sector Undertaking. Tamil Nadu was buying from the same SECI at Rs 2.69 per unit since September 2021, pointed out Srikanth.
Further, Srikant said that changes in law in Power Purchase Agreements (PPA), state transmission charges, and central transmission charges would affect the state solar project. But by purchasing power through SECI, the state could save an amount of Rs 2,260 crore, including the cost of power evacuation infrastructure.
With the strengthened One Nation-One Grid, any state can purchase power from anywhere, which makes dealing with SECI easier. Similarly, he clarified that if the state purchases power from outside, it does not need to set aside land for a power plant.
The then YSRCP government had also defended the SECI deal, stating that if the project was set up outside the state, the cost of power evacuation substations, etc., need not be borne by the state. Establishing the project outside the state results in lower power landing costs compared to setting it up within the state. This is because the central government is giving an exemption of central grid charges for power from outside the state, said the YSRCP government.
Gautam Adani met the then chief minister YS Jagann MOhan Reddy at the latter's residence in Tadepalli on October 14, 2021. After the meeting in the following months the state discoms had signed Power Sale Agreements (PSAs) and Power Purchase Agreements (PPAs) with SECI.
Timeline: October 28, 2021: Andhra Pradesh cabinet approved proposal to procure 7,000 MW of solar power from SECI
November 13, 2021: Andhra Pradesh Electricity Regulatory Commission (APERC) gave approval to procure 7,000 MW in three tranchesDecember 20, 2021: K Ramakrishna, State Secretary of CPI, filed a Public Interest Litigation (PIL) in High Court, contesting the approval that circumvented competitive bidding
May 4, 2022: TDP MLA and the then Assembly's Public Accounts Committee (PAC) Chairman Payyavula Keshav filed another PIL in the High Court, stating that the state agreed to pay a higher price of Rs 2.49 per unit when solar power was available at rates of Rs 1.99 per unit in the open market
March 6, 2024: Andhra Pradesh High Court directed APERC to decide on the petitions filed by DISCOMs seeking approval for tripartite agreements between SECI, Adani’s subsidiaries, and the state
April 12, 2024: APERC approved the SECI agreement, allowing the state to procure solar power at Rs 2.49 per unit. However, the approval was contingent on the outcome of the High Court's PIL proceedings.