Guwahati: Power Ministry has issued directions to gencos to use the powers under Section 11 of the Act today in the light of current circumstances due to sharp increase in electricity demand.

According to the Ministry, with rising power consumption and electricity shortages in some locations, generation must be maximized. Despite attempts to improve domestic coal supply, there is still a gap between the demand for coal and the supply of coal, which is causing coal reserves at generating stations to deplete at an alarming rate.

Taking note of the fact that the blending of imported coal to the extent of 10% is not occurring as stipulated, and the reserve stocks of coal are continuing to dwindle, the Power Ministry issued directions to all Gencos on 18.5.22 that if orders for import of coal for blending are not placed by Gencos by 31.05.2022, and if the imported coal for blending is not placed by Gencos by 31.05.2022, and if the imported coal for blending is not

If imported coal for blending purposes does not begin arriving at power plants by 15.06.2022, defaulter Gencos will have to import coal for blending purposes to the extent of 15% (in order to meet the shortfall of imported coal for blending purposes in Quarter1, i.e. Apr-June 2022) in the remaining period up to 31.10.2022. According to the Ministry, domestic coal-based power plants whose tariff is determined under Section 63 of the Act have expressed concerns about the pass-through of increased costs in tariff if imported coal is used, and have requested a suitable methodology to determine the impact on tariff of mandatory blending of imported coal. The ministry thoroughly investigated the proposal, and a methodology was created in cooperation with the Central Electricity Authority (CEA), which was reviewed in a meeting with stakeholders on May 20, 2022. Based on the debate, the approach was altered to be consistent with the existing methodology used by the CERC.

In view of the current emerging circumstances, and in continuation of the orders to import coal for blending issued under Section 11 of the Act, the Ministry has instructed that:

a) The technique referred to in paragraph 6 above shall be applied by generating firms delivering power under Section 63 of the Electricity Act, 2003, and state governments/discoms to compute compensation for blending with imported coal.

b) The billing and payment system for these plants shall be in accordance with the PPA. However, in order for Gencos to import coal with appropriate cash flow, preliminary billing must be done on a weekly basis. Procurers must pay at least 15% of the provisional amount within one week of receipt of the bill. This provisional billing and payment will be subject to reconciliation during the PPA's final billing and payment on a monthly basis.

c) If the producing business fails to pay 15% of the weekly provisional bill, it is free to sell 15% of its electricity in the power market. The generating businesses must ensure blending with imported coal and preserve coal stock in accordance with existing regulations and MoP directives.

d) This policy applies to coal imported for blending by domestic coal-fired power plants through March 31, 2023.