The coal ministry has asked Coal India to sign the new format fuel supply agreements with power units coming up between January 2012 and March 2015.
The directive came in response to a clarification sought by the miner on whether it should sign supply pacts with new thermal plants on the terms mentioned in the existing contracts or the new agreements, which significantly dilute the miner’s supply obligations.

With no end in sight to the continuing tussle between Coal India Limited (CIL) and power producers over the fuel supply issues, the Power Ministry has petitioned the Prime Minister's Office (PMO) to intervene and settle the issue pertaining to signing of new fuel supply agreements (FSAs) and some controversial clauses in it.

Power minister Sushilkumar Shinde has sought Prime Minister Manmohan Singh’s Office’s intervention in mandating Coal India Ltd to ink Fuel Supply Agreement (FSA) within a month in its 2009 format. In his May 9 letter to the Prime Minister’s Principal Secretary Pulok Chatterji, Shinde expressed concern that the FSA finalised by the miner is heavily tilted in its favour. He said the penalty of 0.01 per cent with zero penalty for the first three years has triggered concerns among power utilities.

New Delhi Lack of assured coal linkages may drive 18 firms to open market

As many as 18 upcoming power projects with an aggregate capacity of over 25,000 MW might be forced to violate their tariff commitments and seek a much higher price from consumers. This is because the coal ministry has rejected a request from the developers of these projects for assured coal linkages and they might have no other option but to resort to the open market for fuel.

An inter-ministerial panel has been set up to find a solution to the dispute between the Ministries of Coal and Petroleum on simultaneous extraction of gas and coal.

The panel, headed by Member Planning Commission, Mr B. K. Chaturvedi, is expected to meet on May 16. Official sources said that the Petroleum Ministry wanted coal mine methane (CMM) extraction to be done on the lines of coal bed methane (CBM).
Extraction process

Objections by Labour Minister Mallikarjun Kharge and Environment Minister Jayanthi Natarajan today blocked a key power sector reform Bill in the cabinet.
The Independent Coal Regulatory Authority Bill, 2012, seeks to empower the watchdog to “determine the price of raw coal, washed coal and by-products”, according to the cabinet note. It proposes to give the watchdog the power to authorise mining, production and supply of coal, and suspend or cancel operations of errant coal producers. The power sector is in distress due to the poor availability of coal.

New Delhi In what may come as a relief for power project developers, the coal ministry has directed state-owned coal companies to ensure uninterrupted fuel supply to plants commissioned till March 31, 2012, as well as those to be commissioned during fiscal 2012-13 even if they fail to sign fuel supply agreements (FSAs). The coal supply to these power projects would be maintained by coal companies under the MoU route till the time fuel user and supplier companies are ready to sign the FSAs.

New Delhi Notwithstanding the CAG stance favouring the auction route for allocation of natural resources, power companies such as NTPC, Tata Power, Rpower and Jindal Power might get another set of captive coal blocks without having to go through the bidding process.

The new rule on coal block auctions finalised by the coal ministry proposes to carve out a portion of the country’s coal reserves for the power sector that would be offered to companies through state-run corporations. Those companies that have been awarded a power project on the basis of tariff-based competitive bidding would be eligible for this exclusive allocation, official sources said.

The Union Cabinet on Thursday referred the draft bill for setting up a coal regulatory authority to a GoM. Informing this, a minister said, “Coal matter has been referred to GoM.” He, however, did not provide details as to why the matter was referred to the GoM.

Sources in the coal ministry said that a consensus could not be reached on some of the provisions in the Bill as some of the ministers felt it needed modifications. Also, the “general opinion was that why so many executive functions have been given to the regulator”, sources said.

The Cabinet is expected to consider on Thursday the draft bill for setting up coal sector regulator to ensure transparency in the allocation of coal blocks and to expedite the resolution of pricing disputes. “The Cabinet may take up Coal Regulatory bill tomorrow (today),” coal minister Sriprakash Jaiswal said.

About a fortnight ago, the Coal Ministry had said it will soon come out with the Coal Regulatory Bill, 2012.