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CIL to supply coal to pre-2009 power projs on domestic prices

Last Updated: Monday, April 29, 2013 - 20:49

New Delhi: State-owned Coal India Ltd (CIL) will continue supplies at domestic prices to power projects commissioned before 2009, while the post-2009 plants, which have signed power purchase agreements (PPAs) with producers, will get the dry fuel largely at cost plus basis.

"The Cabinet Committee on Investment (CCI) on April 22 decided that CIL will continue to supply domestic coal at 90 per cent of the annual contracted quantity (ACQ) for pre-2009 projects," official sources said.

In case of post-2009 power projects that have either been commissioned or will be commissioned by March 31, 2015, where letters of assurance have been issued and PPAs concluded, will get 65 per cent of the ACQ on cost plus basis, sources said.

New projects commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers.

This has apparently put an end to the logjam between the Coal and Power Ministries over the pooling of price of imported and domestic coal.

The power projects commissioned before 2009 aggregate a capacity of 65,185 MW, whereas post-2009 projects have a capacity of 36,000 MW.

Sources further said that the present arrangement however "will not cover the projects where tapering linkages have been issued".

They added: "The Committee further decided that the details of other post-2009 projects where PPAs have not been signed or have been concluded on a competitive bid basis or projects with high bank exposure will be ascertained."

It directed officials to work out detailed modalities by the first week of next month.

Earlier, an inter-ministerial panel was formed, under the Chairmanship of Coal Secretary S K Srivastava, to look into the pricing issues impacting power generation.

The Cabinet Committee on Economic Affairs in February had approved in-principle the price pooling mechanism while Planning Commission Deputy Chairman Montek Singh Ahluwalia recently had said that coal pool pricing may lead to revision in power tariffs.

The Prime Minister's Office had earlier directed CIL and Central Electricity Authority (CEA) to work on pooling coal prices to ensure 80 per cent supplies to power plants.


First Published: Monday, April 29, 2013 - 20:49
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