Millennium Post

Coal Regulatory Authority Bill receives GoM’s okay

A Group of Ministers (GoM) approved on Wednesday a Bill which seeks to set up an independent regulatory authority for the coal sector to address contentious issues like pricing, supply and quality. The Coal Regulatory Authority Bill will be moved to the Cabinet within 10 days for its approval.

‘We (GoM) had a very successful meeting on both issues of Coal Regulatory Authority Bill and pass-through mechanism for supply of coal. Both the things are ready and hopefully in a week or next ten days we should be ready to take it to the Cabinet,’ Power Minister Jyotiraditya Scindia told reporters after the meeting of GoM, which is headed by Finance Minister P Chidambaram.

Scindia said some of the major functions of the proposed authority would be related to pricing, quality and supply of coal. ‘It (Bill) balances the interest of all stake holders, it protects the interest of all stakeholders and at the same time gives a very judicious balance to the Regulatory Authority to be able to supervise the supply and demand of coal in the country,’ he said.

He added that the GoM had achieved closure on pass through mechanism structure as well, and ‘Coal and Power Secretaries will now be working on putting together a note for the Cabinet to take both these issues forward’.
Coal Minister Sriprakash Jaiswal said, ‘The format for Coal Regulatory Authority Bill has been approved and would be forwarded to the Cabinet.’ A pass-through mechanism means that the price charged from electricity distribution companies will absorb the rising cost instead of being cross-subsidised by pooling of or absorbed by the power-generating companies.

Settling the issue of fixing coal prices, the Group of Ministers (GoM) had earlier this month decided that the proposed regulator will not determine fuel rates, a job that will continue to be vested with the producers. The regulator will be, however, empowered to resolve disputes including those arising out of fuel supply agreements (FSAs).
‘There is an agreement that pricing must be left to the producer of coal but the regulator will have power to adjudicate on disputes relating to price, quality, supplies. All disputes will be adjudicated with the regulator and then there will be an appellate authority,’ the FM had said.

Coal India and the power major had locked horns recently and the state-run power utility had withheld payments of Rs 1,000 crore to CIL subsidiary ECL, saying the fuel supplied was of poor quality.

The GoM includes Environment Minister Jayanthi Natarajan and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
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