The proposal of the Central Electricity Authority (CEA) on price pooling formula for blending domestic and imported coal has run into rough weather with three major states of West Bengal, Jharkhand and Orissa opposing it strongly on the grounds that it will help coastal power plants and lead to rise in electricity tariff.
In its strategy paper, CEA had proposed that for coastal power stations (up to 300 Km from coast), blend of imported coal up to 20 per cent be allowed of committed coal quantity; for non-coastal, non-pit head power stations (equi-distant from mine-head and port) – to be blend imported coal up to 15 per cent of its committed quantity and for pit head stations where transportation of indigenous coal a major constraint – to blend up to 15 per cent of its committed coal quantity.
For the remaining power stations, it has proposed they shall not physically receive imported coal. Since cost of imported coal is higher than domestic coal, shall pay incremental charge per tonne on domestic coal to compensate for increased quantity of imported coal required to be used by coastal and non pithead non-coastal stations. The incremental charge will include adjustment for higher GCV of imported coal available to these stations.
However, West Bengal government is opposed the policy proposed by CEA and it did not attend the meeting held by CEA on coal pool pricing as a mark of protest. Similarly, the Coal and Railways Ministries also did not take part in the meeting showing signs of cracks in the new formula. “The West Bengal Government is of the view that the price pooling of coal will only boost coastal power plants and discriminate against others. It was unacceptable to it as it was one of the major coal bearing state,’’ a senior official in the Power Ministry said.
The states of Jharkhand and Orissa have also shown their dissent against the proposal of the CEA and are of the view that electricity tariff will rise in such a scenario. The CEA is of the view that end-consumer tariff could move up by 10 paise per unit. All these states have also questioned the authority of CEA in deciding issues related to pricing of coal and this could lead to further delay in finalising a policy on the issue.
Article source: http://www.thehindu.com/business/Industry/article3742390.ece