Plants commissioned before Mar 2009 not under price pooling

Last Updated: Tuesday, February 26, 2013 - 19:49

New Delhi: Power plants commissioned up to March 31, 2009, will get coal at Coal India's notified prices, which would address concerns of states over 'price pooling' of the dry fuel, the government said Tuesday.

"In the CCEA (Cabinet Committee on Economic Affairs) ... has decided that in respect of plants commissioned up to March 31, 2009, domestic coal will continue to be supplied as hitherto at CIL's (Coal India) notified prices," Coal Minister Sriprakash Jaiswal said in a written reply to the Lok Sabha.

"This addresses the major concerns of states with regard to price pooling," the minister added.

The minister further said that some of the state governments had expressed reservation on the mechanism and in meeting held with power utilities "five power utilities agreed to the price pooling, while 10 power utilities opposed it."

"A detailed note on pooling of price of imported coal with domestic coal was sent by the Ministry of Coal to Cabinet Committee on Economic Affairs. The CCEA considered the note ... And has decided on certain guidelines for pooling of price," the minister said.

A report on the mechanism was prepared by Central Electricity Authority (CEA) in consultation with CIL.

CIL had said price pooling is a mechanism to implement fuel supply agreement (FSA) that it has to sign with power companies. If price pooling is approved, then 15 percent supply of imported coal "will be not in the cost plus method, but in pooling mechanism", it had said.

The CIL board had earlier approved the modified FSA without price-pooling, for assured supply of 65 percent through domestic sources and 15 percent from imports at cost plus basis.

Many state governments, including West Bengal, have voiced their opposition to the price pooling issue as they fear that this will lead to increase in electricity tariffs.

PTI

First Published: Tuesday, February 26, 2013 - 19:49

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