Coal import by pvt cos under UPERC scanner

The UP Electricity Regulatory Commission (UPERC) has raised the ante over UP Power Corporation Limited’s (UPPCL) approval to import of coal by two private companies. The commission is of the view that the private companies may import large quantity of expensive coal, that too, from dubious sources and the consumers may eventually have to bear the brunt in the form of higher power tariff. Already, the high price of power proposed to be provided by the two companies is under the regulator’s scanner.

Last week, UPPCL had allowed two private companies to import coal for power generation. In fact, one has been allowed to import 5.5 lakh tonne— which translates to 12% of the total coal requirement. The other has been asked to procure coal from the open market.

“The sources of coal proposed to be imported will have to be reviewed. Certain checks and balances will have to be put in place to ensure that coal is not imported from dubious sources,” UPERC chairman Desh Deepak Verma told TOI. He added that there a need to limit the amount of coal proposed to be imported. “The imported coal comes at higher prices. This may be passed on to the consumer,” Verma said.

The commission is also reviewing if the private companies need to take prior permission from the regulator before any import of coal is made. A senior UPERC official said that under the new guidelines of the central electricity regulatory commission (CERC), the state regulator can cap the quantity of coal to be imported.

The two companies in question have coal linkages to feed their power plants in UP. Both of them were established under the Memorandum of Understanding (MoU) route wherein any rise in incurring cost would be passed on to the power consumers. UPERC sources point that it is this very fact that has brought the contentious issue in the radar of the state power regulator.

UPPCL had given approval to two private companies to import coal in the wake of coal crisis that was marring the generation of power in an already power-starved state. There had been significant dip in the coal supply to the state-owned power plants of UP in what contributed to a substantial decrease in power supply— not only to the rural consumers but also those in major towns like Lucknow, Noida and Ghaziabad.

The UPERC is also reviewing the high prices of power which the two power companies have proposed to the state. Though the companies have given their representations, the UPERC is not satisfied.

Source: ToI

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