Millennium Post

Govt lets ‘new’ power plants pass costs on to consumers

The Cabinet Committee on Economic Affairs (CCEA) on Monday formally buried a proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants.

However, in case of new projects commissioned after 2009, any higher imported cost of coal will be passed through to the consumers, a source attending the CCEA meeting said here. These projects largely have a cost-plus mechanism for calculation of electricity tariff, he stated in an effort to defend the move.

‘Price pooling is out of the window,’ said the source. While no formal reason was given for ‘burying the price pooling proposal’, the source said that power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates.

Private power producers wanted sub-market domestic coal prices to be averaged out with international price of imported coal. The pooling was being opposed for various reasons by older power plants and domestic coal producers.

‘For the remaining 24,000 mw projects, it is work in progress... remaining being which have tariff based linkages, which have no PPAs or which have tapering linkages,’ the source said.
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