Millennium Post

PSUs must give PPA status to coal ministry by today

The government has sought by 10 April  the status of the power purchase agreements from 20 companies, including NTPC, NMDC, NHPC and Neyveli Lignite, that have applied for coal mines to be alloted to PSUs.

'The companies who have not submitted the status of their Power Purchase respect of the application submitted in response of NIA (Notice Inviting Application with regard to 17 blocks for allotment to Government companies) are requested to furnish the 10 April,' the Coal Ministry said.

A power purchase agreement (PPA) is a contract between two parties — one who generates electricity for the purpose of sale (the seller) and one who is looking to purchase electricity (the buyer).

The power purchase agreements  defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation among others.

Other companies which have been asked to submit the status of PPA are Andhra Pradesh Power Generation Corp, Bihar State Power Generation, Gujarat Industries Power Company Ltd, Kerala State Electricity Board and Neyveli Uttar Pradesh Power Ltd among others.

Initiating the process of allocation of coal mines, the government had last year invited proposals from PSUs for alloting 17 blocks to them, mostly for captive power plants.

The development came in the wake of the government's repeated announcements to make policy for mines allotment transparent, following comptroller and audi general (CAG) terming potential losses of Rs 1.86 lakh crore to the exchequer on account of blocks allotment to 57 private firms without auction.

The blocks on offer have estimated reserves of 8.45 billion tonnes.     


The inter-ministerial panel under the Chairmanship of Finance Minister P Chidambaram is likely to meet on Wednesday to discuss the draft coal regulator Bill, which seeks setting up of a regulatory authority for the coal sector.

‘The meeting of the Group of Ministers (GoM) on draft coal regulator Bill) is likely on Wednesday,’ a government official said.

In January, the Government had said that it would soon appoint a coal regulator to monitor the fuel pricing, sampling and other practices in the sector.

Coal Minister Sriprakash Jaiswal, who is part of the GoM, had earlier said that discussions are underway and the government may soon appoint a coal regulator.

Power Minister Jyotiraditya Scindia had earlier said: ‘Power Ministry and Planning Commission will be working on the draft of the coal regulator...’

The setting up of an independent regulator for the coal sector is considered important for fixing guidelines for price revision, improving the competitiveness in e-auctions, setting trading margins and increasing transparency in the allocation of reserves.

According to sources, some of the issues such as the pricing of coal and bringing on the selection board a representative from the Power Ministry were raised during the last meeting of the inter-ministerial panel held in January.

Earlier, the Cabinet had discussed the proposal for a coal sector regulator and asked the GoM to make recommendations on its powers and functions.  
Next Story
Share it