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Reverse auction coal miners can’t pass on fuel cost to power consumers

The Centre has ruled out passing of any portion of the fuel cost to consumers by the power producers, who have obtained coal blocks through reverse auction.

Gireesh B Pradhan, Chairman of the Central Electricity regulatory Commission, told reporters after an MCC Chamber of Commerce meeting here on Friday that in a recent directive, the Government has made it clear that the coal block owners could not change their premise on “zero” fuel cost.

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“Everybody had bid zero, and extraction costs are subsumed in that. We have received direction from the Ministry that in case of PPAs, the final tariff should be less than whatever tariff was earlier decided. You cannot shift the energy cost now to fixed costs”, CERC Chairman added.

Meanwhile, West Bengal, which has received seven coal blocks in recent allotments, has decided to go in for tender for selection of mine developers and operators. Manish Gupta, West Bengal Power Minister said that the bidding for MDO selection would be conducted after all the clearances are obtained.

The proposed arrangement between the State Government and the MDOs would be on the basis of lowest bid for coal raising cost. Earlier, the State had an arrangement with an MDO on Coal India’s price parity basis.


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