ICPPA, CCAI urge MCL to not release coal at minimum commitment level

Captive power producers and coal consumers association have expressed concern over drop in dry fuel supply and sought steps by Mahanadi Coalfields Ltd (MCL) to withdraw its decision to release coal at minimum commitment level and quantity.

While the Indian Captive Power Producers Association (ICPPA) has written a letter to the Director (Marketing) of Coal India Ltd (CIL), Coal Consumers Association of India (CCAI) has petitioned the MCL CMD over the shortage in coal supplies.

Normally, coal supplies pick up post monsoon but this year, the situation has only "worsened", they claimed and sought withdrawal of a notice issued by MCL recently for release of monthly schedule quantity of power and nonpower consumers at trigger Level (minimum commitment level) for the second month in a row in December under Fuel Supply Agreement (FSA).

The ICPPA secretary-general Rajiv Agrawal in a letter to CIL said CPP and industries are going through a difficult economic phase.

While welcoming steps undertaken by MCL in November 2019 to improve daily production by 28 per cent as compared to October, he said the "healing-touch to CPP" from these initiatives has been withered away.

Claiming that the MCL circular of November 28, 2019 creates an illusion that monthly FSA quantities have been uniformly reduced for all power producers, he claimed that on the contrary, it is selectively penalizing CPP.

In case of any shortfall for "Other Power Plants" (other than CPP and supplying power to state distribution companies); through "sub-group" in Ministry of Coal, they get coal allotment on Ad-hoc basis - from any mines or mode (rail/ road) or CIL subsidiary, he said.

However, CPP do not get such facility from Ministry of Coal, and hence FSA quantity has to be treated as sacrosanct, said Agarwal.

Urging MCL to treat linkage quantity for CPP as sacrosanct and not resort to such curtailment of FSA quantity, ICPPA letter further requested the CIL subsidiary to release quantity curtailed in November2019.

In a letter to MCL CMD, CCAI secretary general Subhasri Chaudhuri said MCL has already supplied FSA quantity to both power and non-power sectors at "trigger level" (minimum commitment level) in November 2019 and, therefore, consumers exected the desired relief by getting MSQ in December.

However, to their utter surprise and dismay, MCL has again decided to supply monthly quantity at trigger level for December. "This is an unexpected burden on consumers as sourcing coal from the open market is adversely impacting the industries making it difficult for them to sustain in the competitive market," said the letter.

"Therefore, we would earnestly request you to revisit the decision taken by your organisation and offer full monthly scheduled quantity to your consumers for the month of December 2019 onwards," the CCAI said.

MCL officials said coal production has improved substantially and supply position is being reviewed.