Coal shortage to trigger power tariff increase in Maharashtra

• 12 years ago (2012-05-05)
• David Flin

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The Times of India has reported that a shortage of coal, combined with wet coal problems in 2011, will result in the Maharashtra State Electricity Distribution Company Limited (MSEDCL) putting up its electricity tariff to meet the increased cost of importing power. MSEDCL purchased power from India’s two power exchanges to make up for a reduction in generation in Mahagenco and NTPC plants.

The Maharashtra Electricity Regulatory Commission (MERC) has conditionally approved MSEDCL’s request, but stated that it would examine the power purchases before clearing them.

MSEDCL cited eight reasons for a sharp decline in power availability from its regular sources in 2011-12. These including flooding at coal mines in Orissa, causing a shortage of coal from this source, and such coal that arrived was wet, and hence generated less output. In addition, MSDECL stated that unexpected shut downs as Jaigad, Dabhol and Korba dramatically reduced power availability.

MSEDCL contended to MERC that due to these unforeseen problems, its demand-availability calculations went haywire, and it had to resort to load shedding in several parts of the state. This led to widespread public protests, and the company had to purchase electricity from exchanges and by floating tenders for short term power purchase. MSEDCL pointed out that short term power purchase does not require MERC approval, provided that it is not more than 5 percent in either quantity or cost. Since MERC had not determined the power purchase plan for 2011-12, the 5 percent limit was not applicable.

MERC has directed MSEDCL to amend the tariff petition for 2012-13 and include these issues in it.