Fuel Supply Agreement

The Ministry of Coal has not received any refusal from NTPC for signing of the revised model Fuel Supply Agreement (FSA) with Coal India Limited (CIL). The FSAs to be signed by NTPC are mostly for additional units at the existing power stations, for which FSAs have already been signed. NTPC has requested CIL to consider signing of the FSA on the same parameters as existing with earlier NTPC plants but with revised trigger point on disincentive as per the Government directives. This information was gien by the Minister of State for Coal Shri Pratik Prakshbapu Patil in a written reply in Rajya Sabha today.

The Minister said that the CIL Board has approved of modified model Fuel Supply Agreements for signing with those Thermal Power Stations having long term Power Purchase Agreements (PPAs) with Distribution Companies (DISCOMS) and which have been commissioned between 1.4.2009 and 31.12.2011 and recommended by Central Electricity Authority / Ministry of Power. As per this model FSA, there is penalty @ 0.01% of the basic value for the shortfall quantity arising out of non-supply of stipulated coal, which is to be effective after 3 years of signing of FSA.

To improve coal supply to the power plants, the Ministry of Coal has directed CIL to consider supply of coal as per Annual Contracted Quantity (ACQ) with assured level at 80% for the new Power Plants which have been commissioned and/or would get commissioned between 1.4.2009 and 31.3.2015. This dispensation will be applicable in respect of plants having long term Power Purchase Agreements (PPAs) with Distribution Companies (DISCOMS) and which have been identified by Central Electricity Authority / Ministry of Power. Ministry of Coal has also advised CIL to conclude FSAs with such power plants, which have already been commissioned till 31.12.2011, by 31.3.2012.

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