The Central Electricity Authority’s proposal on a price pooling formula for blending domestic and imported coal has run into rough weather with three States — West Bengal, Jharkhand and Orissa — opposing it on the grounds that it will help coastal power plants and lead to a rise in electricity tariffs. For coastal power stations (up to 300 km from coast), the Central Electricity Authority (CEA) had suggested that a blend of imported coal up to 20 per cent be allowed of committed coal quantity. For non-coastal and non-pithead power stations (equidistant from mine-head and port), it has proposed a blend of imported coal up to 15 per cent of its committed quantity. For pit-head stations, where transportation of indigenous coal is a major constraint, it has suggested blend of imported coal up to 15 per cent of its committed coal quantity.

For the remaining power stations, the CEA has proposed that they shall not physically receive imported coal. Since cost of imported coal is higher than domestic coal, they shall pay an 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 (gross calorific value) of imported coal available to these stations.

However, the West Bengal government has opposed the proposal and did not attend the meeting held by the CEA on coal pool pricing as a mark of protest. The Coal and Railways Ministries also did not take part in the meeting. “The West Bengal Government is of the view that the price pooling of coal will only boost coastal power plants and discriminate against the others. It is unacceptable to it as it is one of the major coal-bearing states,” a senior official in the Power Ministry said.

Jharkhand and Orissa have also shown their dissent against the proposal, and are of the view that electricity tariff will rise if it were to come into effect. These states have also questioned the authority of the CEA to decide issues related to pricing of coal.


Coal India board meet on FSA inconclusiveJuly 31, 2012