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In UP, Power Supply Contracts Are Unraveling With Help From the State Electricity Regulator

The BJP-ruled Uttar Pradesh government is using strong-arm tactics, such as the unilateral termination of power purchase agreements (PPAs), to get generators to reduce electricity tariffs. These developments, in Uttar Pradesh and a handful of other states, are in one sense a fallout of India’s shift towards auctions to buy electricity (which have brought tariffs to record lows), prompting state governments to cancel or renegotiate contracts that guaranteed a fixed price to generators for the power they produce.Over the last few months, the state-owned discom, UP Power Corporation Ltd (UPPCL), has terminated more than half a dozen PPAs including those of Bajaj Energy in its bid to force developers to accept its terms on tariffs.In this quest.....

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