Consumers' Page

Issues faced by the Power Sector Consumers:

1. Recurrent issue of grade-slippage faced by Power sector consumers from various CIL Subsidiaries

Power consumers procuring coal from various CIL Subsidiaries have repeatedly expressed concerns over the recurrent issue of coal grade slippage in their representations. Significant variation between the billed and received grade of coal procured from a number of CIL Subsidiaries- especially in ECL, along with certain collieries of SECL, WCL, MCL and CCL in recent months have led to severe loss to the Utilities even amid the financial crisis caused by the pandemic situation. ECL: The issue of grade variation has consistently occurred in Bankola, Ukhra, POCP Railway sidings Salanpur and Sonepor Bazari area of ECL in recent months where variation of three to five grades have been observed in the coal received by the Utilities. SECL: Grade variation in the tune of one to four grades has been reported during supply of -250 mm coal from Gevra & Kusmunda mines of SECL in both Rail and Road mode in recent months. Instances of grade slippage have been as high as 86%- 100% in certain rakes supplied from these areas.

WCL: Significant grade variation in the tune of two to five grades have been observed in the rakes loaded for Power sector consumers from the Ghughus siding of WCL’s Wani area during July-August 2020. MCL: According to Utilities procuring coal from MCL’s Talcher sidings in June, July and August 2020, grade slippage in the tune of one to

three grades have occurred in the Subsidiary’s Talcher SPUR- I, II, IV, VI, VII, VIII sidings. CCL: Grade slippage is recurrent in CCL’s Magadh and Amrapali mines in recent months. It has been requested to MoC, CIL and the concerned Subsidiaries that the declared grade of the mines where issues with coal quality are frequently reported may be reassessed and taken up with the Coal Controller for re-gradation so that the customers may receive the actual grades of coal.

2. Immediate processing of longpending refunds against supply of ungraded coal to Power sector:

As per the provisions in Fuel Supply Agreements (FSAs), if supplied coal to Power sector consumers is declared ungraded, the buyers are eligible to limit the payment of cost of coal to Rs. 1 per tonne apart from paying Royalty, cess etc. However, many Power Utilities are yet to get the refund for supply of ungraded coal by a number of CIL subsidiaries. In many cases refunds are pending for even more than two years. Request has been made to CIL and the concerned Subsidiaries for immediate processing of those long-pending refunds for supply of ungraded coal as the prevalent FSA provisions or if formulating a new policy, it may be expedited to provide relief to the Generators immediately.

3. Request for compensation against huge shortage in rakes received from CCL & SECL:

Power Utilities often struggle due to significant shortage in received quantity of coal from various CIL Subsidiaries. Power sector consumers having valid FSAs with CCL has suffered major financial loss due to shortage in received quantity in the tune of 18% compared to the RR quantity in rakes from Birds Sounda-D Colliery of the Subsidiary in July, 2020. Meanwhile, TPPs procuring coal from SECL has also suffered due to significant shortage in the tune of (8.9% -11%) in received quantity compared to the RR quantity in the rakes received from Dipka, Gevra and especially Old Kusmunda siding of SECL in July, 2020. Some Utilities procuring coal from of SECL’s Kusmunda siding had to pay significant penal charges for overloading in these rakes in spite of the shortage in supply. This might have been caused by faulty weighment at the weighbridges in the area. It is requested by the consumers to reimburse the loss either by adjusting the amount with the coal value paid by Power companies or by offering additional quantity from the aforesaid sources. Faulty weighbridges at the sidings may often lead to shortage in coal quantity due to incorrect weighment of rakes. Therefore, periodic recalibration of the faulty weighbridges is urged upon.

4. Request for supply of crushed coal to the Power sector from alternative sources of SECL mines:

Lumpy/ bigger size coal is not suitable for usage in the power sector. Utilities are not getting their allotted quantity from SECL’s Kusmunda and Junadihsidings since May 2020. Though (-250 mm)coal is presently being offered from the Subsidiary’s New Kusmunda-2 and Old Kusmunda sidings temporarily to supplement the coal supply, Utilities are struggling to use the coal without crushing because of its relatively bigger size..

Issues faced by Non-Regulated Sector consumers:

5. Formulation of policy for issuing credit notes to NRS consumers for supply of ungraded coal:

NRS consumers suffer major financial losses in case of supply of ungraded as there is no provision for issuing credit notes to them in

this regard. Formulation of a suitable policy in line with the Power sector is requested to CIL and MoC so that the NRS consumers can get their requisite refund from the coal companies against supply of ungraded coal.

6. Request for not supplying consecutive rakes to NRS consumers:

Industries procuring coal from various CIL Subsidiaries have stated that long-pending rakes are being sent to them by the coal companies at one go resulting in supply of coal quantity, much above their Monthly Scheduled Quantity (MSQ) even as most of the Industries are running their plants at low capacity and are suffering due to lack of workforce and amid the pandemic. This has led to hazards at the plant end including fire, damaging of equipment and plant infrastructure etc. CIL and its subsidiaries have been requested not to supply consecutive rakes to NRS consumers much above their MSQs.

7. Early processing of refunds for supply of lower grade coal from SECL’s Baroud OCM:

Due to the non-availability of allotted G-9 grade of coal in SECL’s Baroud OCM, NRS consumers were supplied with G-14 grade of coal. The differential coal value of the received quantity from August to December 2019 is due to be refunded to the consumers. Also, certain NRS consumers were supplied with G-10 grade coal from SECL’s Jampali mines since January 2020 as an alternative of G-9 from Baroud OCM. Refunds in this regard are also pending. Considering the acute financial crisis the NRS consumers are going through in the COVID period, it is requested to CIL and the concerned Subsidiary immediately expedite the processing of pending refund amounts.

8. Request for issuance of RDOs from SECL’s Mahan II Colliery:

The NRS consumers procuring coal from SECL’s Mahan II colliery have already made the payment for issuance of RDOs for the month of July 2020 but still the same has not been issued by the concerned Subsidiary. Immediate issuance of RDOs from the said colliery is requested so that the consumers can start the lifting process and get their allotted quantity within the stipulated time period.

9. Request by NRS consumers for immediate execution of tripartite agreement:

Request has been made on behalf of the NRS consumers procuring coal from CCL for immediate execution of the tripartite agreement against Special spot E-auction Phase –II held on 30.06.2020 between the coal company, consumers and the third party agency (QCI) so that the consumers are able to start procuring coal by availing the facility of 3rd Party Sampling & Analysis.

10. Request for immediate reconciliation of Referee results and settlement of credit/debit notes by CCL:

NRS consumers procuring coal from CCL have stated that reconciliation over undisputed, challenged and non challenged referee analysis results are pending since long and in many case, settlement of debit/credit notes are due for more than two years. Request has been made to CIL and CCL for urgent reconciliation of Referee results and settlement of credit/debit notes in order to reduce the financial burden from the Industries.