Short supply of coal: Government clears methodology to compensate power firms


Short supply of coal: Government clears methodology to compensate power firms

The power ministry has approved a methodology to compensate power producers for any short supply of coal. The move follows the Cabinet Committee on Economic Affairs’s (CCEA’s) decision in March to help power producers who are essentially facing a shortage of raw material supplies for reasons beyond their control. The CCEA approval was based on the recommendations of a group of ministers and a high-level empowered committee on stressed power assets.

Even after making advance payments, power plants were not compensated for short supply of coal even if it was due to the fault of Coal India or the railways. The CCEA had clarified that in case of such shortfalls, the supply contract may not lapse and be carried over for up to a maximum of three months.

“Indian Railways and coal companies shall frame/revise the operational guidelines immediately to implement the above recommendations,” the power ministry’s latest note said. Read More

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