Millennium Post

‘Will power cos lower tariff if global fuel prices fall?’

Power companies which seek hike in tariffs due to global factors should also reduce rates when international coal prices soften, an expert has said.

R V Shahi, former Power Secretary and a power sector expert, said the compensatory tariff is a variable tariff and it should be revised both ways.

Welcoming power sector regulator CERC's order to provide a compensation package to private companies like Adani Power and Tata Power for increase in the cost of international coal, Shahi said, 'CERC has recognised, if there is change in Law in Indonesia, which leads to increase in the price of coal from that country for the companies setting up thermal power projects here, they (firms) should be compensated.

'The companies, which are increasing their tariffs due to increase in price of coal from Indonesia, should also revise the tariff downwards if international prices fall.'

Earlier this month, CERC (Central Electricity Regulatory Commission) in its order said Adani Power should be granted compensation package for its Mundra project which would provide a cushion against the escalation in cost of imported coal for the plant.

The company had approached CERC last year, seeking revision in tariff from its 1,980-MW Mundra project in Gujarat saying increase in imported fuel cost.

In a similar case, CERC allowed Tata Power to increase tariff from its 4,000 MW ultra mega power project at Mundra.

The Commission has asked the states which buy electricity from Tata Power's Mundra plant to form an expert panel to decide on compensating the firm for higher cost of coal imports from Indonesia.


A parliamentary panel has criticised the government for undue delays in allotment of coal mines through auction route amid dry-fuel crunch faced by the country.

'The committee cannot but deplore these prolonged consultations delaying the allocation through bidding system and strongly recommend the government to complete the process of consultation without any further delay to ensure early allocation of identified coal blocks through competitive bidding process to boost coal production,' the panel said.

The Standing Committee on Coal and Steel, chaired by Trinamool Congress MP Kalyan Bannerjee, in its report tabled in Parliament last week also objected to 'unduly long time' in auction despite Mines and Minerals (Development & Regulation) Amendment Act 2010 passed by Parliament for introduction of system of auction by competitive bidding of coal blocks.

It said the delays were despite the Committee in its previous report asking the Coal Ministry to 'immediately implement the Act in letter and spirit'.
Next Story
Share it