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Why import coal? UP power regulator asks gencos

While thermal power generating plants are grappling with coal shortages and there is a rush among them to import coal, the Uttar Pradesh Electricity Regulatory Commission has sought clarifications on procurement of imported coal by private gencos in the state.

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The regulator also asked the generating companies to specify whether there was a shortage of administered priced coal and whether the shortage was at the coal mine end or due to rail wagon availability for coal transportation.


While thermal power generating plants are grappling with coal shortages and there is a rush among them to import coal, the Uttar Pradesh Electricity Regulatory Commission has sought clarifications on procurement of imported coal by private gencos in the state.

In separate letters to Lalitpur Power Generation Company, Rosa Power Company, Bajaj Energy Limited and Dhariwal Infrastructre Limited, a wholly owned subsidiary of CESC, the regulator has sought information on whether the consent of the beneficiary (which in this case is UPPCL and its discoms), has been taken in advance for procuring imported coal and whether they had obtained the approval from their board of directors.

The regulator’s missive comes after Union power minister RK Singh asked all the states and IPPs to use 10% imported coal for blending purposes to ensure maintaining adequate coal stocks and many states, including Gujarat, Maharashtra and Karnataka and Tamil Nadu, have already allowed the cost of imported coal as a pass-through.

The regulator also asked the generating companies to specify whether there was a shortage of administered priced coal and whether the shortage was at the coal mine end or due to rail wagon availability for coal transportation.

“If the shortage is due to wagon availability for transportation, then how would these constraints be mitigated in case of imported coal, while such steps are not working in case of domestic coal,” it asked.

Seeking information on these issues at the earliest, the commission said that in the absence of detailed justifications, it may be difficult to consider the excess expenditure as eligible for fuel price pass through.

The commission’s latter to the gencos has come at a time when the Lalitpur Power Generation Company and Bajaj Energy Limited, both Bajaj group companies have invited bids for the procurement of 3.20 lakh MT of imported coal on Thursday.

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