‘Entire power sector has been ruined’: Naidu blames Jagan for Andhra power sector’s Rs 1.29 lakh crore loss

Andhra Pradesh Chief Minister N. Chandrababu Naidu said the state had suffered losses of over Rs 1.29 lakh crore in the power sector, attributing the financial crisis to the previous YSRCP government.

In a study on the power sector of Andhra Pradesh, Naidu detailed the heavy financial burden faced by consumers and the mounting debt of Andhra Pradesh power utilities.

He reported a tariff burden on consumers of Rs 32,166 crore, an increase in debt of Rs 49,596 crore and losses due to inefficient management totalling Rs 47,741 crore.

“We have introduced power sector reforms 1.0 and 2.0. Now we need reforms 3.0 to transform the sector and empower the society,” Naidu said. “On one hand, the burden is heavy and on the other, the expectations of the society are high. We have to find a way to revive the state with minimum damage. It is a very tight rope.”

Naidu said the initial and subsequent phases of power sector reforms were implemented during the previous administrations led by his party, Telugu Desam Party (TDP). He blamed the financial losses on delays in commissioning thermal power plants, Polavaram Hydro Electric Project and additional costs of short-term power purchases, among others.

The Prime Minister highlighted the interest burden on loans amounting to Rs 10,892 crore and cumulative losses due to poor performance of distribution companies (DISCOMs) and Andhra Pradesh Power Development Company Ltd (APPDCL) amounting to Rs 9,618 crore.

“It’s taxpayers’ money. This situation is a lesson in what happens when an ineffective and inefficient government comes to power. It burdens the people and becomes a curse for the state. It’s a case study,” he said.

Naidu criticised the previous YS Jagan Mohan Reddy government for withdrawing incentives promised to companies by the TDP administration between 2014 and 2019 and for renegotiating solar and wind power purchase agreements (PPAs), which led to legal disputes. He also accused Reddy of increasing the financial burden on society by increasing electricity tariffs through additional levies, resulting in a 98 per cent increase in rates for the lowest-using households.

Presenting the paper, Naidu attributed the “historical losses” mainly to Reddy’s “ineffective management”.

“The entire power sector has been completely ruined due to the inefficient and arrogant rule of Jagan Mohan Reddy,” Naidu said.

“Poor consumers faced higher tariff hikes of 78-98 per cent compared to 29 per cent for middle class consumers. A total of 153 lakh consumers were affected,” he noted.

Naidu said the debt of power utilities has increased from Rs 62,826 crore in fiscal year 2018-19 to Rs 1.12 trillion in fiscal year 2023-24, illustrating the severe financial burden on the sector.