PSERC allows usage of imported coal in 2 plants

The Punjab State Electricity Regulatory Commission (PSERC) has paved the way for the use of imported coal for two thermal power plants being built in the private sector.

The PSERC ordered on Monday that in the case of the 1,980-MW (megawatt) plant at Talwandi Sabo, being built by Sterlite Powers, and the 1,400-MW plant being built by Larsen & Toubro at Rajpura, the power purchase agreement (PPA) and the letter of assurance (LoA) should be operated in tandem.

The Punjab State Power Corporation Limited (PSPCL) has so far been objecting to the use of imported coal for these plants. The PSERC's decision is expected to facilitate timely commissioning of both plants, which were otherwise heading for delays.

These two plants, along with five others across the country, were set rolling on the basis of domestic coal and are suffering due to "indecision" on the part of state governments, power corporations and regulatory commissions over imported coal.

The PSERC's decision that LoA and PPA are part and parcel of the contract is the first of its kind in the country.

The commission acted on petitions filed by the Talwandi Sabo Power Limited (TPSL, for Talwandi Sabo plant) and the Nabha Power Limited (NPL, for Rajpura plant), which had accused the PSPCL of failing to fulfil its obligation of arranging sufficient quantity of quality coal for three units of 660 MW each at Talwandi Sabo and two units of 700 MW each at Rajpura.

Both petitioners had also contended that they would not be able to operate their plants beyond a certain plant load factor (PLF) as the subsidiaries of Coal India Limited (CIL) were assuring to arrange only 80% of the coal supply. They submitted that as per the model fuel supply agreement of the CIL, 80% of the annual contracted quantity (ACQ) was assured. Moreover, the 80% would include 65% domestic coal and 15% imported coal. The reduction in quantity of coal would lead to "idle capacity" of the plants, according to the petitioners.

The PPA provides for the use of domestic coal to generate electricity, while the LoA envisages the supply of coal from mines of subsidiaries of CIL; in the event of short supply, the balance quantity shall be met through imported coal available with the CIL.

The commission observed that since the LoA and the PPA should be operated in tandem, imported coal available with coal fields operated by the CIL could be supplied occasionally. The PSERC further directed the TSPL and the NPL to pursue the matter with the government authorities for the use of coal as per the LoA. The commission also directed that the PSPCL and the Punjab government would coordinate and cooperate with the TSPL and the NPL in this regard.