UP denies permission to thermal plants to procure imported coal

LUCKNOW : Thermal power plants in Uttar Pradesh will not buy imported coal despite the Centre mounting pressure on them for blending 10% foreign coal with the domestic one, people aware of the development said.

According to them, the state government has refused to grant them permission to buy foreign coal, apparently to protect end consumers from feeling the heat. It was felt that buying foreign coal would put additional financial burden on generating companies which might have forced them to increase the electricity price to recover the increased cost. The government decision will be applicable to both government-owned and private thermal plants in the state.

Special secretary, energy, Anil Kumar, communicated the government’s decision through a written letter to the Rajay Vidyut Utpadan Niagm (UPRVUNL) and the UP Power Corporation Ltd (UPPCL).

“I am directed to convey that the government has taken a considered decision that the UPCVUNL thermal plants as well as independent producers (private generating companies) will not import coal,” Kumar said in the letter dated May 20.

The government decision comes in the wake of the UPRVUNL seeking clear directions from the government on whether to buy or not the imported coal in view of the Central government having issued an advisory to states asking them to float tenders to import foreign coal to meet a part of their fuel requirement.

The corporation had pointed out that buying highly expensive imported coal would entail an increase in the power price by Rs 1 per unit.

Earlier, the UP Electricity Regulatory Commission (UPERC) had posted some questions to the Utpadan Nigam, asking them to respond before it imported coal.

Welcoming the government decision, UP Rajya Vidyut Upbhokta Parishad chairman Avdhesh Kumar Verma said that the move would save consumers from the tariff hike that would have been inevitable had the thermal plants imported the coal.

“The government’s decision not to permit power generating companies will benefit end consumers in a big way,” he said. Verma had opposed the Centre’s advisory for imported coal on various platforms. He wrote a number of letters to the UPERC, the state government and the Centre.