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Govt not mulling subsidy to power cos: Jyotiraditya

The government is not considering any subsidy to power generators or hiking power tariffs to lessen the financial burden of costly coal imports, power minister Jyotiraditya M Scindia said on Thursday.

However, cost of imported coal is to be considered for pass through to consumers as per modalities suggested by the Central Electricity Regulatory Commission (Cerc), he said in a written reply to the Lok Sabha.

The coal ministry has issued orders supplementing the new coal distribution policy while the power ministry has issued appropriate advisory to regulatory commissions to consider the request of individual power producers to decide for pass through of higher cost of imported coal on a case-to-case basis, Scindia said.

"There is no such proposal under the consideration of Central Government to provide subsidies to lessen the financial burden on coal importing power generators as well as hike the power tariff to make generation of electricity from imported coal more viable," he said.

Price of imported coal depends upon various factors such as heat value, moisture content, ash content, source of origin, ocean freight, etc. and varies from week to week. The price of domestic coal also varies from mine to mine depending upon grade of the coal, he said.

Further, landed cost of imported coal at power plants depends upon its distance from the coast. As ocean freight and inland transportation cost are a major component that contribute towards the landed cost of imported coal, import of high grade coal results in saving of transportation cost, Scindia said.

Source: The Economic Times