'Entire power sector got 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 has suffered over Rs 1.29 lakh crore in losses in the power sector, attributing this financial downturn to the previous YSRCP government.

In a white paper released on the state’s power sector, Naidu detailed the significant financial burdens faced by consumers and the rising debts of Andhra Pradesh’s power utilities. 

He reported a tariff burden of Rs 32,166 crore on consumers, an increase in debts amounting to Rs 49,596 crore, and losses due to inefficient governance totaling 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 society," Naidu stated. "On one side, the burden is heavy, and on the other, public expectations are high. We must find a way to revive the state with minimal damage. It’s a very tight rope to walk."

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

The Chief Minister pointed out the interest burden from borrowings at Rs 10,892 crore and accumulated losses due to the poor performance of distribution companies (DISCOMs) and the Andhra Pradesh Power Development Company Ltd (APPDCL) at Rs 9,618 crore.

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

Naidu criticized the previous YS Jagan Mohan Reddy government for retracting 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 raising the financial burden on the public by increasing power tariffs through additional charges, resulting in a 98 percent hike in rates for the lowest-consuming households.

Presenting the paper, Naidu attributed “the legacy losses” mainly to Reddy’s “inefficient governance”.

“Entire power sector got totally ruined with the inefficient and arrogant rule of Jagan Mohan Reddy,” said Naidu.

“Poor consumers faced higher tariff increases of 78-98 percent compared to 29 percent for middle-class consumers. Overall, 153 lakh consumers were impacted,” he noted.

Naidu highlighted that the debt of power utilities surged from Rs 62,826 crore in FY 2018-19 to Rs 1.12 lakh crore in FY 2023-24, illustrating the severe financial strain on the sector.