Coal price hike: MahaGenco to shell out Rs 201 cr more

State undertaking spends Rs 9,000 cr a year for 38 mn tonnes of coal, which linkage from WCL is 20.8 mn tonnes

The Maharashtra State Power Generation Company (MahaGenco), with installed capacity of more than 6,980 MW, would be hit following Coal India's move to increase prices by 10-15% in the western region. The state undertaking would have to shell out additional Rs 201 crore a year for its coal procurement from the Western Coalfields Ltd (WCL), an arm of Coal India.

MahaGenco official told Business Standard, “MahaGenco spends nearly Rs 9,000 crore annually for the procurement of 38 million tonnes of which coal linkage from WCL is of the order of 20.8 million tonnes. Of the Rs 9,000 crore, MahaGenco’s outgo purely to WCL comes to Rs 3,800 crore. With the present hike, which has come into effect from June 12, MahaGenco wil have to pay extra Rs 201 to WCL."

MahaGenco managing director Subrat Ratho said, “Fuel price rise will make the power tariff unviable especially for industries in Maharashtra. The maximum impact will on industrial consumers.”

According to Ratho, industrial consumers cross-subsidise the tariffs of other categories. He however, added it would be difficult to give the exact rise in tariff.

A WCL official confirmed the rise in coal prices in the western region. “The 30% rise was made when pricing was shifted to gross calorific value from useful heat value basis. However, due to the power ministry’s demand the price hike was rolled back.  However, now the coal price has been leveled off,” he informed.

According to the MahaGenco official, of the total coal linkage of 38.6 million tonnes from Coal India and its subsidiaries during 2011-12, the company received 29 million tonnes. Subsequently, MahaGenco contracted supply of 3.35 million tonnes of imported coal on the advise of Central Electricity Authority. “Of the 38.6 million tonnes, 20.8 million tonnes of coal linkage was from WCL. However, MahaGenco received 16 million tonnes. During 2012-13 the coal linkage from WCL is also 20.8 million tonnes. We have been rigorously pursuing our case for the supply of good quality coal without any interruption,” the official noted.