Govt allows gencos to charge compensation tariff for coal import

The Centre has allowed electricity generating companies to charge a compensation tariff in lieu of importing coal. This will cover both the state government and privately-owned companies.

“The methodology shall be used by the generating companies (Gencos) supplying power under Section 63 and state governments to calculate the compensation due to blending with imported coal. The mechanism for billing and payment for these plants shall be as per PPA,”a statement from the Ministry of Power said.

“To enable gencos to import coal with adequate cash flow, the provisional billing shall be done by gencos every week. Payment of at least 15% of the provisional bill shall be made by the procurers in a week from the date of receipt of the bill. This provisional billing and payment shall be subject to reconciliation during final billing and payment on a monthly basis as per the PPA,” it said.

In the event of default on the payment of 15% of the weekly provisional bill, the generating company shall be free to sell 15% of the power in the power exchange. The direction was issued under Section 11 of the Electricity Act.