MoP issues directions to domestic coal-based plants with PPA through tariff-based bids

The Ministry of Power (MoP)has modified norms for pass through of higher cost of imported coal used bydomestic coal-based plants having power supply agreements with discoms under tariff-based bidding.

The domestic coal-based power plants, whose tariff has been determined under Section 63 of the Electricity Act have raised concerns about the pass through of the increased cost in tariff if imported coal is used and have requested for a suitable methodology to determine the impact on tariff of mandatory blending of imported coal. The ministry has finalised a methodology which will be used by the generating companies supplying power under Section 63 of the Electricity Act, 2003 and state governments/discoms to calculate the compensation due to blending with imported coal. The mechanism for billing and payment for the plants will be as per power purchase agreement (PPA). However, to enable gencos importing coal with adequate cash flow, the provisional billing will be done by the gencos on weekly basis. Payment of at least 15 per cent of the provisional bill will be made by the procurers within a week from the date of receipt of bill. This provisional billing and payment will be subject to reconciliation during final billing and payment on monthly basis as per the PPA. In case of default of payment of 15 per cent of the weekly provisional bill, the generating company will be free to sell 15 per cent power in the power exchange. The generating companies will ensure blending with imported coal and maintain coal stock as per extant norms and the directions issued by the Ministry of Power from time to time. The direction is for coal imported for blending by such domestic coal-based power plants up to March 31, 2023.


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