The Union Ministry of Power has told the Central Electricity Regulatory Commission (CERC) to ensure the rates for power produced from auctioned coal blocks won by power producers do not exceed what was concluded in power purchase agreements (PPAs).´The revision of rate undertaken by the CERC shall not lead to higher energy (fuel) charges and total rate throughout the tenure of the PPAs,´ said the Power Ministry´s directive to the CERC. The directive restricts higher energy charge by coal block winners.
Industry calculations reveal for every six million tonnes of coal production, the payout by companies allotted coal blocks for power generation will be Rs 1,500 crore each year. The Power Ministry has asked the CERC to review the energy components of the rate, which comprise of the price of coal according to the auction amount, transportation cost, washery and crushing charges, royalty and duties, and levies.