Coal news and updates

UP allows 2 private power companies to import coal

UP Power Corporation Limited (UPPCL) has allowed two private power generation companies to import coal for power generation despite the UP Electricity Regulatory Commission (UPERC) sending out a reminder to UPPCL to ask the utilities about the basis of high price of power the two companies have proposed to supply in 2014-15.

According to the annual revenue requirement (ARR) report of UPPCL, they have proposed to supply power at Rs 6.06 per unit and Rs 7.75 per unit.

UPERC, which sent the reminder to UPPCL on September 11, had asked the corporation to give its reply within three days - that is by September 14.

However, on Friday, the UP government gave its approval to the two companies to import coal, citing impending coal crisis. One has been allowed to import 5.5 lakh tonnes of coal.

Experts point out that the price of imported coal is almost three times the cost of indigenous coal. While indigenous coal is available at Rs 2,000 per tonne, imported coal comes at a cost of Rs 6,000 per tonne.

The two power plants have been set up under the memorandum of understanding (MoU) route wherein the cost of power is passed on to the utility -UPPCL in this case. While principal secretary (energy) Sanjay Agarwal was not available for comments, UPPCL managing director, AP Mishra confirmed that the cost will be borne by UPPCL. He, however, refused to say if the cost would be passed on to the consumer.

"Why were other power plants that are facing a coal crunch not allowed to import? These companies have coal linkages, yet they have been allowed to import coal. This way the two would be able to justify the high cost of power," said chairman of All-India Power Engineer Federation, Shailendra Dubey.

Source: The Times of India