Coal price rise means costlier power, warns MahaGenco

Maharashtra State Power Generation Company (MahaGenco) says it would have to pay an extra Rs 201 crore yearly, due to the 10-15 per cent rise in supply rates from Western Coalfields Ltd (WCL, a Coal India arm.

The rise announced by WCL is for the entire western region. “The rise was made when pricing was shifted to a Gross Calorific Value (basis) from (the earlier) Useful Heat Value basis,” said a WCL official. “Due to the power ministry’s demand, the hike was rolled back.” The roll back had been reversed, he said.

Mahagenco has an installed capacity of 6,980 Mw. A company official told Business Standard, “We spend nearly Rs 9,000 crore annually for procuring 38 million tonnes (from WCL and other CIL subsidiaries), of which coal linkage from WCL (meaning, the amount it is supposed to supply) is 20.8 mt. The outgo purely to WCL comes to Rs 3,800 crore.”

Warned MahaGenco managing director Subrat Ratho, “This rise will make the power tariff (rate) unviable, especially for industries in Maharashtra. The maximum impact will be on industrial consumers.” This is important, notes the MD, since industrial consumers cross-subsidise the rates charged for other categories of consumers. He said it would be difficult to give the exact rise likely, as a result, in rates.

The MahaGenco official said of the total coal linkage of 38.6 mt, it had got only 29 mt during 2011-12. Subsequently, MahaGenco contracted for 3.35 mt of imports, at the advice of the Central Electricity Authority. “Of the 20.8 mt linkage from WCL, we received 16 mt. During 2012-13, the linkage from WCL is also 20.8 mt. We have been rigorously pursuing our case for the supply of good quality coal without any interruption,” he said.