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Consumers' Page
Issues faced by both Power and NRS Consumers:
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1. Submission to SECL regarding immediate processing of various forms of pending refund:
Consumers from Non-power Sector are struggling due to non-release of Performance Security BG and Financial Coverage BG amount worth crores of rupees submitted by them to SECL even after termination of their respective FSAs. BG amounts are not refunded to consumers even after fulfilling their part of FSA obligations including lifting of coal against DOs/ Rail programs issued against their MSQs during the three months notice period.
Power Sector Consumers too have significant amounts pending with SECL for many months in terms of refund of credit notes against shortsupply of coal via Road mode and on account of grade slippage.
Request has been made to SECL and CIL to immediately process various forms of pending refunds to both Power and NRS consumers.
2. Submission by Power sector regarding significant grade slippage in coal supplied via Rail Mode from ECL, NCL, CCL:
Subsidiaries such as ECL, NCL, CCL are facing significant grade slippage in coal supplied via rail mode during August-October period in 2021.For instance,
*Coal supplied from ECL’s POCP, Bankola, Sonepur Bazari sidings during that period have been been 3-4 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 7 grades.
*Coal supplied from NCL’s Dudhichua, Dudhichua WW, Bina WW, Block-B sidings have been have been 2-3 grade lower than the declared grades during that period.
*Coal supplied from CCL’s Birds Sounda, Churi sidings for those three months have been 2- 3 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 5 grades.
Such consistent and significant grade slippage substantially increases the cost of generation for the power plants which directly impacts power tariff.
Request has been made to CIL and the respective Subsidiary Coal Companies to take adequate steps in order to eradicate grade slippage and ensure supply of FSA-grade of coal to the Power Sector consumers at the earliest possible. Also, re-gradation of certain mines may be considered where the cases of grade variation are rampant.
3. Submission by Power consumers regarding impediments of coal transport through RcR mode:
Owing to soaring coal demand in the Power Sector, Coal India Limited has allowed supply of coal to the Utilities through Road-cum-Rail (RcR) mode as and when supply through Rail mode is not sufficient to meet the required demand of coal. However, the consumers are facing various impediments while carrying coal from pitheads to the railway good shed.
*Supply of coal through RcR mode is an intermittent supply arrangement for the Power Sector for a relatively smaller quantity. Therefore, the number of interested bidders is significantly less. This causes the rate for loading and transportation of coal to be significantly higher than the long-term contract awarded by Coal Companies for the same area.
*Utilities are facing substantial time lag between the issuance of DOs and starting of supply of coal from pithead to Railway good sheds due to formalities such as obtaining mining permit, truck permit etc. Getting permission of the transit storage is time consuming due to internal formalities such as getting clearance from the pollution control board etc.
*In RcR mode, Power sector and Industries are asked to procure the allocated quantities from the same source. As road loading points function with a fixed capacity, deployment of number of trucks per consumer gets drastically reduced. Also, movement of trucks is only allowed for a fixed period (6 am-6 pm).
*The Railway good sheds handle both inward traffic and outward traffic. Therefore, till the evacuation of the inward traffic, stacking and loading of coal in rakes for outward traffic cannot be alloed which causes significant delay in loading.
Request has been made to the Ministry of Coal and CIL to ensure that consumer-wise allocation of coal quantity may be commensurate with the loading capacity as per available infrastructure of a particular road loading point to avoid congestion at mine end. Rational allocation of good sheds / private sidings based on booked quantity is also requested.
4. Submission by Power Sector to expedite release of e-Auction rakes:
There is extremely low materialization of rakes allotted under e-Auctions including Special Forward e-Auction for Power Sector and rakes allotted under the same e-Auction scheme are pending since long. Most of the rakes being
loaded are FSA rakes. As a result, there is huge pendency of e-Auction rakes especially from MCL and SECL. More than 600 rakes are pending from these two CIL Subsidiaries.
Irregular liquidation of e-Auction rakes does not allow the daily requirement of the Utilities to be fulfilled as the demand of coal has been soaring. On the other hand, it is also causing the working capital of consumers to be stuck for long period.
Request has been made to Ministry of Coal, CIL, CEA and the Railway Board so that 15% - 20% of the total supply of rakes / day may be earmarked and supplied against e-Auction quantities in tandem with FSA (Linkage auction) rake as this would enable the Power houses to build up their stock levels.
5. Submission by Power Sector regarding significant short-receipt in rakes from various sidings of SECL:
Power Sector consumers procuring coal from various collieries of SECL such as Burhar, , Churcha, Naurajabad sidings are facing shortreceipt of nearly 4% in almost all the rakes supplied from these areas while amount of shortsupply has increased to nearly 4%-7% in rakes supplied from the Subsidiary’s Bhatgaon, Rajnagar OC, Katora, NCPH sidings under Central India Coalfields (CIC)
Such significant loss of quantity due to shortreceipt of coal leads to huge financial loss for the Power Plants and subsequently causes the power tariff to go up.
Request has been made to CIL and SECL to take adequate steps including weighment of empties, recalibration of weighbridges in these areas etc to eradicate the issue of short-receipt of coal.
7. Request by Power Sector for reimbursement of idle freight on account of short-lifting alongwith GST:
While certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight alongwith GST components charged by the Railways, SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight. As the Generators are paying freight charges to the Railways with GST, non-refund of this amount is leading to significant financial losses to these Utilities.
CIL has been requested to intervene so that all the CIL Subsidiaries reimburse the idle freights for underloading alongwith the GST amount.
Issues faced exclusively by NRS Consumers:.
7. Request for improving coal supply via Rail mode for Non-regulated Sector:
This dismal coal supply situation to the NRS consumers started around August/ September of 2021 and became further arduous since then as coal stock at many plants plunged below critical level. The condition had shown signs of improvement during November ’21. But the coal supply has again been affected since December ’21 due to renewed demand at the power sector for building coal stock.
At present, coal rake supplies to the Industries are less than 50% of the coal secured through Linkages and e-Auctions. Also, there is a huge pendency of rakes for the Non-power Sector (over 4500) from most of the CIL Subsidiaries. Supply via Road mode is also affected and reduced as Power Sector is allowed to procure coal via RcR mode. Replacing the domestic demand with imported coal is also unviable due to its high price and high ocean freight rates.
Request has been made to the Ministry of Coal, Commerce & Industries, Steel, Power and Railways, Coal India Limited and the Railway Board to that a specific quantity (minimum 15% of total coal dispatch by Rail mode) may be earmarked for the Non-regulated sector even during the high power demand scenario in order to
safeguard a portion of supply-commitment to the Industries.
8. Request for consideration of CEA norms in determining normative coal requirement for CPP sub-sector in Tranche-V NRS Linkage Auction:
As per coal consumption norms laid down by CEA for CPP Sector, certain factors needs to be considered for calculating normative coal requirement including loss of heat value of coal for storage @85 KCal/kg, 5% GCV loss due to the difference between GCV (ARB) and GCV (EQ) and 0.8% transit loss. However, these factors are not considered in the calculation of normative coal requirements as given in the scheme document of CIL. As a result, the Captive Power Plants will be eligible for less quantity of coal in comparison to their actual coal requirement in the upcoming NRS Linkage Auction.
Request has been made to CIL so that normative requirement of coal in the CIL scheme document for NRS linkage auction for the different capacity Captive Power Plants may be calculated as per existing CEA guidelines.
9. Submission by NRS consumers to allow inter-plant transfer of coal:
Certain plants from the Non-regulated Sector are often facing constraints due to restrictions on rake allocations and of coal movement via Road and RCR modes for Non-regulated Sector. Also, coal stock at some plants remain alarmingly low due to lack of production/transport issues at the designated mines which eventually Submission has been given to the Ministry of coal to allow interplant transfer of coal within the same company/business group (within different units of the same organisation) for higher capacity plants in the Non-Power Sector in line with the Power Sector as it would ensure maximum lifting of booked Linkage/Exclusive e-Auction quantities, reduce dependence on imported coal and encourage the NRS consumers to go for more long-term Linkage/Exclusive Auction security.
10. Request for incorporating new guidelines for accepting FC BG by the Subsidiaries in the CIL Scheme Document of Linkage Auction:
CIL’s modified guidelines of June 2020, financial coverage for coal supplies through FSAs under linkage auction and Exclusive Auctions to NRS consumers and under Special Forward e-Auction Schemes to Power sector had been reduced from as delivered price of coal for 30 days supplies to as delivered price of coal for 10 days supplies.
However, SECL is still asking for financial coverage equivalent to 30 days coal value as per previous practice from its customers as the new modality of accepting financial coverage has not been updated in the scheme document so far.
Request has been made to CIL to make necessary amendment in the scheme document in this regard so that so that NRS consumers of SECL may submit FC BG as per the modified CIL guidelines.
