Coal India Ltd’s move to seek consent from the consumers for pooling prices of imported and domestic coal is facing stiff opposition from coal-bearing States.

As part of its bid to enter fuel supply pacts (FSA) with power plants commissioned since April 2009, CIL has started circulating a proposal in this regard beginning last week to amend the existing fuel supply contracts.

West Bengal has opposed the move for price-pooling. “We have already written to the coal and power ministries opposing the move. Along with us, at least two other States, I know, Odisha and Chhattisgarh are not in favour of the plan,” Principal Secretary of the West Bengal Power Department, Malay Kr De, said here on Thursday.

De was speaking to reporters on the sidelines of an Energy Conclave, organised by the Confederation of Indian Industry (CII).

According to him, all the three States have informally taken up the matter of price-pooling with one another.

He further argued that under the price pooling system, common people of the State would have to bear the additional electricity tariff. “In price pooling, there are no benefits for the users in the State,” De said.

Price pooling proposal came on the back of a Presidential Order to CIL to enter FSAs with new power plants with guaranteed supply (trigger) of 80 per cent of the requirement as against an estimated domestic availability of 65 per cent of the requirement.

The proposal should help the new coastal power plants, mostly in private sector, to get imported coal at a subsidised price. Preliminary estimates suggest that pooling should increase domestic coal prices by Rs 100 a tonne impacting generation cost by approximately 10 paise on an average.

The feasibility of the proposal was questioned by CIL board in its earlier meeting to finalise the draft FSAs earmarking aggregate 65 per cent domestic coal content.

(This article was published on September 27, 2012)
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