Revision of coal prices to hit PSPCL hard

Yogindra Mohan
Patiala

The Punjab State Power Corporation Limited (PSPCL) will face the heat of revised coal prices in case the Punjab State Electricity Regulatory Commission (PSERC) does not take this into account for tariff revision of 2012-13.

The basic coal price will increase by minimum 40 to 50 per cent for the PSPCL, said a senior official dealing with coal. With the transportation charges remaining fixed, the overall increase in fuel charges would be about 20 to 25 per cent.

The projected gap of Rs 8,983 crore in the aggregate revenue requirement (ARR) and determination of tariff petition filed by the PSPCL for the year 2012-13 is going to increase at least by 20 per cent after revision of coal prices from January 1.

Fuel charges of Rs 4,171 crore in the ARR formed the major component of total requirements of Rs 20,415 crore. The current year’s revised charges of Rs 3,595 crore will need further revision as fuel charges of last quarter will increase by 20 per cent. The present per unit fuel cost at thermal plants is around Rs 1.75.

According to officials, a 12 per cent rise in coal prices is likely to raise cost of generation by about 40 paise per unit. The additional tariff increase for overall 20 per cent increase would amount to 65 paise per unit. In case this revision is not taken into account, the state power utilities may not pass this on to the consumers and suffer increased losses.

It may be mentioned that the PSPCL has not submitted any specific proposal to bridge the projected gap of Rs 8,983.97 crore.

An increase of 55 per cent in tariff rates for all consumer categories would be required across the board to cover the proposed gap.

Since January 1, Coal India has begun pricing coal based on gross calorific value or heat produced by burning it. Earlier, prices were fixed based on moisture and ash content present in coal. This has increased the number of coal category from the original seven to 17. Coal will be sold in 17 price brands starting from the variety that produces 2,200 kilo calorie to one that produces 7,000 k cal. In between, there are 15 price bands, each at an incremental rise of 300 k cal.

The PSERC will take into account the increase in fuel cost only if the PSPCL presents its submissions before the commission, said a PSPCL official.

The tariff order should have inbuilt provisions for unforeseen increase in fuel and transport costs, said a senior PSPCL official.