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Telangana fumes as Centre looks to transfer its funds to Andhra Pradesh over Power Bill arrears
On August 8, the Telangana government filed a fresh petition in the high court against the Centre’s proposal.
The Union government’s decision to transfer Telangana’s share of funds to Andhra Pradesh, citing power bill arrears to the tune of ₹6,756 crore for the last six years, has evoked a sharp reactions from the K Chandrashekar Rao (KCR)-led government, prompting it to approach the high court.
While the Union government maintained that it has the power to make such moves as per the Andhra Pradesh Reorganisation Act, 2014, the high court last week stayed the contentious decision and directed the Centre not to take any stringent measures against Telangana till the matter is settled.
The Telangana government, on the other hand, claimed that Andhra Pradesh owes ₹17,828 crore to Telangana for various services.
On August 1, Union power minister R K Singh told Parliament that the Centre has the power to enforce its directions on the Telangana government as per the 2014 Act.
In response to a query from Bharatiya Janata Party (BJP) MP G V L Narasimha Rao and YSRCP MP V Vijay Sai Reddy, Singh told Rajya Sabha that the Centre would direct the Reserve Bank of India (RBI) to make the deductions as per the power bills arrears from the central devolutions to be made to Telangana and pay the same to Andhra Pradesh.
“We have been in consultation with the ministry of law and the ministry of finance for giving a direction to the RBI, so that the accounts of Telangana government can be deducted by that amount, which is to be paid to Andhra Pradesh,” Singh said in a written reply.
He added that the Centre was seized of the matter and would resolve it soon.
The Union minister also said that the power ministry had written to the Telangana government on a few occasions, asking it to pay the arrears to Andhra Pradesh.
The Telangana government, however, approached the high court and obtained a stay in 2022, he said. “But since the period of stay has expired, the Centre can invoke its powers to enforce the directions,” he added.
On August 8, the Telangana government filed a fresh petition in the high court against the Centre’s proposal.
According to people aware of the developments, a division bench of the court comprising chief justice Alok Aradhe and justice T Vinod Kumar on August 8 granted further stay on the Centre’s decision and directed that no harsh measures be taken against the Telangana government till the matter is legally settled.
Senior counsel C V Mohan Reddy, who appeared for the Andhra government, opposed the stay, saying the state has supplied power to Telangana for three years, ever since Andhra Pradesh was bifurcated in 2014, on the directions of the Centre.
“So, the Centre has every right to intervene and resolve the issue in an appropriate manner,” Reddy said.
The court deferred the case to August 24 and asked the Centre not to take any stringent measures against Telangana till then, the people cited above said.
Before the bifurcation of combined Andhra Pradesh in June 2014, the two power distribution companies – Southern Power Distribution Company Limited (SPDCL) and Northern Power Distribution Company Limited (NPDCL) – in Telangana region were drawing power from thermal power plants located in Andhra region, as per the power purchase agreements (PPAs).
Since the state was united, there were no payment issues.
After the bifurcation, the power plants in Andhra and Telangana regions were allocated to the respective states.
However, the SPDCL and NPDCL continued to draw power from the thermal power plants located in Andhra Pradesh as per the PPAs and therefore, were supposed to pay the power purchase charges.
Following a series of negotiations between the two states, the two Telangana discoms cleared bills till June 2017, but after that, stopped paying the dues altogether, according to the Andhra government.
A senior energy department official in Andhra Pradesh said though everything was on paper – power purchased by Telangana discoms and the power purchase bills raised by APGenco (Andhra Pradesh Power Generation Corporation) – the Telangana government had failed to clear bills since June 2017.
According to the official, Telangana is supposed to clear a total power bill of ₹3,441.78 crore, and along with interest, the total dues mounted to ₹6,756 crore.
In April 2019, APGenco approached the National Company Law Tribunal (NCLT), seeking recovery of dues from Telangana, but withdrew the petition subsequently on technical grounds and approached the Telangana high court.
In the court, the Telangana government said the Andhra Pradesh government is supposed to pay ₹17,828 crore to the former under various heads.
The payments due from Andhra Pradesh to Telangana include: ₹2,975 crore pertaining to debt servicing of Anantapur and Kurnool districts, ₹322 crore towards inter-state sales, ₹4,746 crore towards market purchases due to stoppage of thermal power by Andhra and ₹1,411 crore on hydro power purchases.
“Further, APTransco (Transmission Corporation of Andhra Pradesh) has to pay Telangana ₹712 crore as investment in employees trust at the rate of 7.5%, ₹190 crore as transmission and state load dispatch centre charges, ₹612 crore towards discoms bonds along with other charges of ₹215 crore,” a Telangana power transmissio corporation (TS Transco) official said on condition of anonymity.
Even as the issue is pending in the court, the Andhra Pradesh government has been repeatedly submitting representations to the Centre, seeking its intervention to ensure the Telangana government clears its pending power bill arrears.
On August 30 last year, Union deputy secretary (energy) Anoop Singh Bisht wrote a letter to the Telangana government, asking it to clear its ₹6,756 crore dues for power purchase from Andhra Pradesh within 30 days, failing which the Centre would have to intervene in the matter.
As a result, the Telangana government moved the high court and obtained stay orders on the proposed intervention from the Centre.
