Odisha opposes pooling price mechanism for coal

The Odiaha government has opposed the proposal of introducing pooling price for coal, which is derived by combining price of the domestic coal and imported coal. “This particular proposition of blending price of imported coal with that of domestic coal possibly does not make any sense to those generating companies located very close to coal mines,” State Energy Secretary P. K. Jena wrote to Chairman of Central Electricity Authority elucidating State’s stand on the issue on Monday.

It is learnt that Coal India Limited would supply coal at pooling price to the generating companies irrespective of whether the generating company use the imported coal or not. “Odisha is coal bearing State and coal is abundantly available of ‘F’ and ‘G’ grade which is solely utilised for thermal power generation. The justification of transportation of indigenous coal from the pitheads of coal bearing States to non-coal bearing States and transporting imported coal to different pithead plants does not appear to be economical prudent which will put avoidable cost of double transportation to the consumer,” Mr. Jena said.

Stating that private power generators would be mostly benefited at the cost of the State and general public, he noted, “the basic objective of importing coal is to meet Fuel Supply Agreement commitments by CIL. Thus a commercial practice at the cost of imported coal should be borne by CIL. If pooling of price is followed, it will ensure subsidy to those power plants which do not have coal linkage at cost of those power plants which are already having coal linkage.”

“The reported cost of Rs. 4,500 per metric tonne under proposed pooling price concept resulting in likely increase of Rs. 100 per metric tonne and consequential increase of electricity tariff by 7 to 8 paise per unit lack clarity both in terms of calculation as well as the supporting data,” Mr. Jena pointed out adding that the State required detail report for further expressing its view.

“The logic behind such a proposition of introducing pooling price in case of coal and putting the consequential power tariff burden on the consumers of coal bearing as well as the non-coal bearing States is definitely not in the national interest,” the energy secretary noted.

“If the Central government goes ahead with such a policy of providing Fuel-Price Security (FPS) in favour of the non-coal bearing States at the cost of coal bearing States and the consequential increase in power tariff is unavoidable for the consumers, the Centre may consider to bear additional cost of FPS and the poverty ridden coal bearing States like Odisha should be exempted from subsidising such avoidable prohibitive costs,” Mr. Jena demanded.