Domestic coal supply to be made proportional, says Power Ministry

The power ministry on Saturday said it will not be possible to supply coal other than on a proportionate basis to make up any shortfall.

The Ministry of Power in a statement said it is monitoring the coal supply situation in the country and has taken steps to ensure adequate coal supply and coal stocks based on the domestic coal received from Coal India Ltd (CIL), Singareni Collieries Company Ltd (SCCL) and captive coal mines.

As per the decision taken in the ministry in consultation with state gencos, IPPs (independent power producers) and central gencos, domestic coal supply will be made proportional to the coal received from CIL/SCCL for all the gencos and it will not be possible to give more coal other than on proportionate basis to make up any shortfall, it added.

It has issued a circular directing certain actions to be taken on priority to enhance the supply of domestic coal.

Firstly, production in captive coal mines allotted to power plants may be maximised to the limit permitted by the ministry.

Secondly, it has been decided that a lesser number of rakes would be made available to such power plants where there is slackness in prompt unloading of coal from rakes.

This step has been taken to maximise the utilisation of available railway rakes. Therefore, this aspect may be monitored at the state government level and unloading of coal may be ensured within the given norm.

It has been reported that several power plants are taking much longer time than the norm in unloading coal from railway rakes, which is affecting the turn-around time, the statement said.

The central electricity authority (CEA) has been asked to monitor the unloading time at power plants.

Thirdly, many generating companies have overdue (for coal companies) running in several hundred crores of rupees. Such a huge overdue amount affects the ability of coal companies to continue the supply.

Therefore, the bills of coal companies must be paid in due time so that coal supplies to such generating companies is not affected on this account.

It has also been observed that the non-operation of certain imported coal-based (ICB) plants in states had put more pressure on domestic coal demand, leading to low coal stocks for domestic coal-based (DCB) plants.

The procurer and sellers are legally bound by the PPA (power purchase agreement) signed by both parties.

While the procurers are bound to pay the bills timely, the gencos (sellers) are bound to maintain adequate fuel stocks and offer availability as per PPA.

Not maintaining adequate fuel stocks or not giving availability on any pretext (such as the high price of imported coal etc) is inexcusable, the ministry said.

Such conduct on the part of a seller should be immediately responded to by the procurer sternly by using all possible contractual and other available legal interventions at the level of state government, the statement noted.

If any gaming is noticed on the part of the seller such as not supplying electricity under PPA and selling in the market should be brought to notice of the Regulatory Commission without any delay under intimation to the Ministry of Power for immediate intervention, the ministry added.

However, it is understood that some of the imported coal-based power plants are facing issues in the PPA due to changes in Indonesian Regulations and an increase in international coal prices, the statement noted.

These issues also need to be resolved based on mutual negotiations in a just and transparent manner, it added.

Hence, states may ensure implementation of PPA with ICB plants with necessary contractual interventions or in extraordinary circumstances use statutory provisions of the Electricity Act 82003 to ensure generation and may approach the ministry for any intervention required in case of an inter-state plant.

The ministry also said that necessary action may be taken to import coal in a transparent and competitive manner for blending purposes based on the demand assessment and to deal with any shortfall of coal availability.