Coal price pooling will hike power tariff: Naveen

Patnaik's opposition to price pooling comes at a time when the issue is hanging fire with most states taking exception to move fearing rise in electricity tariff

Opposing the move to pool prices of imported coal with that of domestic coal, chief minister Naveen Patnaik has written to Prime Minister Manmohan Singh stating that introduction of price pooling will escalate power tariff.

Patnaik’s opposition to price pooling comes at a time when the issue is hanging fire with most states taking exception to the move fearing rise in electricity tariff.

“The state government is of the view that transporting coal from the pitheads of coal bearing states to non-coal bearing states and transporting imported coal to the pithead plants as envisaged in the pooling of prices of imported coal with domestic coal by Ministry of Coal does not appear to be economically prudent. The introduction of the concept of pooling price will unnecessarily increase transportation costs and consequently the power tariff which is certainly not in the national interest,” Patnaik said in his letter.

Patnaik argued that coal import is not at all necessary to run thermal power plants in Odisha which is sitting over abundant coal reserves.

Quoting the Odisha High Court judgment of March 2012, he said Coal India Ltd (CIL) and its subsidiaries are not optimising their coal extraction from the mines and forcing the thermal power companies to depend on imported coal which has a cascading effect on the power tariff, affecting general consumers of electricity. Stating that pooling of prices of imported coal with domestic coal is not in the interest of coal rich states like Odisha, Patnaik has demanded dropping of the idea.

“As the fuel cost is a pass through item, due diligence and cost control by the power generators is of paramount importance. The burden of high cost coal over and above the administered price should not be passed on to the consumers,” he stated in the letter.