New Delhi: India's State Electricity Boards (SEBs) have given their consent for the implementation of price-pooling of coal, Coal Minister Sriprakash Jaiswal said.
The pooling is aimed at offsetting the impact of expensive imported coal on power generation, wherein both imported and domestic coal prices are averaged out to bring uniformity of prices for all consumers.
"A major hurdle has been sorted. The Central Electricity Authority (CEA) has communicated that states have agreed to price-pooling mechanism for coal prices. They do not have any problem," Jaiswal told reporters.
Earlier this month, the Central Electricity Authority discussed the issue with the SEBs, which are going through a severe financial stress. The SEBs are learned to have opposed the move as they are unable to pass on the burden of rising prices to end-consumers.
Maintaining that the formula of pooling is a complicated issue and has never been practised in the country, Jaiswal said, "If it is good for the country, the ministry will implement this. The mechanism has to be discussed with Ministry of Power."
Under the mechanism, Coal India, as per media reports, has been asked to fulfill the fuel requirements of the power companies in the country by mixing domestic and imported coal and pass on the resultant cost to all the power producers, leading to rise in the cost of electricity generation.
Coal India board is expected to meet on July 31 to discuss various issues related to fuel supply agreement (FSAs) with the power companies, apart from pooling price-pooling mechanism and importing coal to meet the requirements of power firms.
Last month, Prime Minister Office (PMO) officials met with Coal Secretary S K Srivastava and Coal India Chairman S Narsing Rao and asked the coal producer to ensure supply of 65% of the committed fuel for the first three years of the FSAs instead of 80% directed by it previously.
However, power secretary P Uma Shankar said Tuesday that FSAs between Coal India and power firms should be signed at 80% from the first year itself.
"We are trying to see that FSAs are signed at trigger level of 80% right from the first year," he said, adding that the final decision, however, on this will be taken by Coal India only.