Power firms may ink fuel supply pact with Coal India by end-Nov

The Prime Minister’s Office (PMO) has asked power companies to sign the fuel supply pacts with Coal India by end of next month, even if they don’t have binding pacts for sale of electricity.

Principal Secretary to Prime Minister Pulok Chatterjee today convened a meeting to sort out issues impeding signing of fuel supply agreements (FSA) between CIL and power producers. “During the meeting, it was decided the by November-end the the power companies should sign fuel supply agreements (FSAs) with CIL,” a government official said.

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The meeting was attended by Coal Secretary S K Srivastava, Joint Secretary (Thermal) in the Power Ministry ICP Kesari, Coal India Chairman and Managing Director S Narsing Rao, among others.

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It was decided during the meeting, the official said, that FSAs can be signed with power companies having long-term and medium term Power Purchase Agreements (PPAs) based on confirmation from Power Ministry that it is benefitting the consumers.

“Medium-term and long-term PPAs will continue subject to confirmation from Power Ministry that it is benefiting consumers,” he said.

Even those power producers who currently have not signed a PPA with any electricity distribution company, can sign the FSA but they will be required to produce the PPA before lifting coal.

On price pooling mechanism, he said that it was decided during the meeting that the Power Ministry will come out with more details with regard on it.

However, he did not elaborate on the details. On allocation of 54 coal blocks through auction route, he said, that “the Coal Ministry will try to start auctioning of the mines by the end of the calender year. The Coal Ministry which has recently received the report from Crisil is discussing on it.”

When asked what was discussed on recommendation of TL Shankar Committee on restructuring of CIL, he said that “Coal India has asked for comments on it from TCS among others.” When asked whether it was also discussed that the Inter-Ministerial Group be granted a permanent status, the official said, “IMG will be a standing body and supervision on the development of coal blocks would be done by the Coal Ministry.”

On September 18, the CIL board had approved the modified FSA without price-pooling with 65 percent domestic coal and 15 percent imported coal at cost plus basis. So far, 29 companies have already signed the initial FSA.

When asked whether the PSU firm has set any deadline for signing of FSAs, Coal India Chairman and Managing Director had said a couple of days back, “We have not put the deadline yet, but one thing we can say is that till December 31 these MoUs are valid. Any thing has to be done before December 31, otherwise they (power companies) will not get coal.”

PTI