Coal linkage criteria be dropped only after 85 percent tie-up of power generation projects under 12th Plan

Minister of State for Energy (Independent charge) Rajendra Shukla raised a forceful demand in the Energy Ministers' Conference here today that the criteria added by the Union Government under the 12th five-year Plan that 'actual drawl of coal will be subjected to 85 percent of power being tied up through long-term PPA with Discoms through tariff-based competitive bidding.' Shukla also demanded that cities having less than 30 thousand population should also be included in RAPDRP (Restructured Accelerated Power Development and Reforms Programme). Besides, the provision of 50 percent expenditure to be incurred on Feeder Separation Scheme should be reimbursed by the Central Government and Feeder Separation Scheme should be included in Rajiv Gandhi Rural Electrification Scheme.

The conference was chaired by Union Energy Minister Sushil Kumar Shinde. Union Minister of State for Energy Shri. K.C. Venugopal, Energy Ministers of various states and officers were also present on the occasion.Shukla said that due to inclusion of the above-mentioned criteria in Coal Linkage Policy, Power Discoms will not be able to draw coal from coal linkages. He said that signing of power purchase agreements (PPAs)/tie-up for 30 percent power against MoU route will result in less than 85 percent power left to be tied up through competitive bidding. The Madhya Pradesh government has incorporated a provision in the PPAs being entered with private companies for supply of 30 percent power at the regulated cost against MoU. However, the company, at any time, offers the sale of any part of the capacity from the project on long-term basis pursuant to any competitive bidding process, it shall be open to the Appropriate Commission. This provision in the PPA would always result in supply of power to Government of Madhya Pradesh or its nominated agency at the most competitive price, as Commission would adopt the most beneficial tariff for supply of power from the project under MoU route. Thus the said provision in the coal linkage policy would deprive the state of the economical power tied up through MoU route, as the developer would not be able to draw coal.He said that in view of the above it is essential and in the interest of the power consumers in the state that the provisions regarding actual power drawl be dropped only after tie-up of 85 percent power.Shukla said that concrete efforts are being undertaken in Madhya Pradesh for making quality and adequate power available to consumers. The distribution companies in Madhya Pradesh have planned works to the tune of Rs. 9000 crore to be executed in next three years. This includes investment under Government of India schemes. The Discoms have also planned several IT initiatives like implementation of ERP, SCADA, Discom-wide energy auditing and automatic meter reading. The implementation of information technology in the distribution infrastructure would not only help reduce human interface, but also help in better quality of data to be available from the field level.Speaking about Restructured Accelerated Power Development Reform Project (RAPDRP), Shukla said that it has included only the cities having more than 30 thousand population. State's 82 cities have also been included in the project. A sanction of Rs. 228 crore has also been received in Part-A, but this project should be expanded with a view to benefiting the cities, which have less than 30 thousand population.He said that Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) is an important initiative by Government of India and should be continued in the 12th Five-Year Plan as well. Feeder Separation work should also be included within the ambit of RGGVY as it would help in ensuring 24-hour power supply to households in rural areas and regulated power supply to agricultural consumers and avoid wastage of power also. He said that 50 percent of the amount invested by the state should be reimbursed by the Government of India.He informed that effective efforts have been made in Madhya Pradesh to reduce transmission losses. For this, the State Government has developed an input-based franchisee model for a 15-year period, which has also been approved by the State Cabinet. This will bring about reduction in losses, improve efficiency in running plants, ensure their better management and new investments will be attracted for improving distribution network.Throwing light in detail on the power reforms in Madhya Pradesh, Shukla informed that during next three years, power losses will be reduced by three percent every year. The state's power companies have reduced their losses to a large extent. These losses were to the tune of 42.3 percent in the year 2006, which have been reduced to 33.60 in the financial year 2011. However, there still remains a large scope for reducing them further. Furthermore, the State Government has approved a Financial Restructuring Plan for the state utilities thereby converting around Rs. 9000 crore of current liabilities to long-term liabilities. This will reduce burden.Shukla informed that so far 169 feeders have been separated in Madhya Pradesh, which has benefited 1487 villages. The State Government has fixed a target of increasing power generation capacity by five thousand megawatts by the year 2013. For attracting investment in the power sector, 49 MoUs have been signed, which will generate 67 thousand 546 megawatt power. Due to implementation of these MoUs, Madhya Pradesh will get 500 MW power at reduced rates. Shukla informed that the State Government has fixed a target to supply 24-hour power to consumers of all categories by the year 2013. A power supply scheme has been chalked out for the same.