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CERC order unlocks INR 17,000 crore for India's power firms

Coal News - Published on Mon, 20 May 2019

Image Source: SCC Online
Financial Express reported that the Central Electricity Regulatory Commission (CERC) has allowed power companies to claim compensation for the additional cost of coal procured from alternative sources due to Coal India’s failure to meet supply obligations. While such compensation facility was available for the FY14-FY17 period under a modified coal distribution policy, it has since ceased to be in operation. The industry estimates accumulated ‘receivables’ to power companies on account of this stalemate at around `17,000 crore.

GMR Energy, which filed the petition claiming pass-through of extra fuel cost before the regulator, will be the immediate beneficiary of the CERC decision. The latest regulatory order, invoking the ‘change in law’ clause in the Electricity Act, virtually entitles a clutch of other plants including those of Jindal Steel and Power, Reliance Power, Rattan India, CESC and KSK Group to similar reliefs. In all, about 15,000 MW of capacity is facing shortfall in supplies from Coal India, according to an industry source.

The CERC said that the compensation on account of coal shortage would be worked out according a formula prescribed by the CERC on a case to case basis.

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Posted By : Rabi Wangkhem on Mon, 20 May 2019
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