Fuel Supply Agreements with Power Plants to ensure Adequate Coal Supply

The Government has decided that Coal India Limited (CIL) will sign Fuel Supply Agreements (FSAs) with power plants that have entered into long term Power Purchase Agreements (PPAs) with Distribution Companies (DISCOMS) and have been commissioned/would get commissioned on or before 31st March, 2015. This decision has been taken to make adequate coal availability for the power plants that have been commissioned/are being commissioned.

The subsidiary companies of CIL are yet to sign any FSA as per this decision.

The captive power plants are getting supplies of coal under the applicable Fuel Supply Agreement (FSA) which is different from that of the proposed FSA for power plants having Power Purchase Agreement (PPA) with Distribution Companies (DISCOMS). The applicable FSAs for existing and new captive power plants have trigger level for penalty for short supply at 60% and 50% of Annual Contracted Quantity (ACQ) respectively.

The estimated coal production will be adequate to meet the demand of the said FSA holders. However, in case of any shortfall in fulfilling its commitment under the FSAs from its own production, CIL may arrange for supply of coal through imports or through arrangements for obtaining coal from State/Central Public Sector Undertakings (PSUs) who have been allotted coal blocks and have started production of coal but have not commissioned their end use plants.

This information was given by the Minister of State of Coal, Shri Pratik Prakashbapu Patil in written reply to a question in Lok Sabha today.

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NCJ