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Power gencos for changes in Coal India’s proposed pricing system

02 May 2018

Independent power generating companies (gencos) want Coal India (CIL) to determine the gross calorific value (GCV) of the fuel on ‘as received basis’ (ARB), in line with international billing practices, as opposed to CIL’s proposal of taking into account 5% moisture for GCV calculation. Gencos were responding to CIL’s invitation for comment as it prepares to move to a pricing system where customers pay for the amount of energy they can get from coal they receive (calories/kg). Currently, the fuel is charged on a per-tonne basis, depending on its grades.
In a letter, the Association of Power Producers (APP) has also suggested third party sampling agencies, which determine the quality and value of the coal supplied, should create more labs and hire more personnel to adhere to the time lines for coming up with sampling reports. FE has seen that letter. Failing to meet such time lines warrant penalty provision, the APP has said. They also want South Eastern Coalfields to come up with a standard accepted credit note format as prescribed by the GST rules.
The new coal pricing mechanism was supposed to be implemented from April 1, but was put in abeyance “till further advice” after customers pointed out that the new regime should be introduced only after CIL has the requisite supporting infrastructure. The coal producing behemoth met industry consumers to discuss the issue on March 26, in which the latter pointed out several problems such as slow processing speed of GCV measurement and uncertain tax implications. More than 70% of coal produced by CIL is consumed by the power sector.
Source: Financial Express