Mahagenco blames poor quality coal, shortage for low PLF

Under fire for alleged gross inefficiency and high cost of generating power, the Maharashtra State Power Generation Company Limited ( Mahegenco) has refuted all the allegations and claimed that it was victim of receiving inferior quality coal from coal utilities. 

The poor quality of coal received, the unfair practices in sampling, the failure to supply the contracted quantity as per Fuel Supply Agreement (FSA) has affected performance, Mahagenco admitted in an official release while asserting that MSPGCL’s position stands vindicated in the recent orders passed by Competition Commission of India (CCI) as well as by Nagpur bench of Bombay High Court. CCI has castigated and penalised CIL for abuse of its dominant position and imposition of unjust and unfair terms in FSA particularly in matter of sampling procedure on the customers. The CCI has ruled that CIL should modify the FSA to provide for fair and joint sampling and testing procedure and may consider sampling at unloading end. The High Court has ordered sampling through independent third party at both loading and unloading end. 

As per directives of High Court, MSPGCL had appointed Central Institute of Mining and Fuel Research (CMFRI) to undertake the third party sampling, who’s results have revealed that the ash content at both loading and unloading end on an average is around 45% as against the ash content of around 28% which has routinely been declared by CIL, which has been submitted to the Court, the generating utility claimed. The GCV of coal as per the independent sampling on an average is around 3250 Kcal/kg, as against the GCV of around 4750 Kcal/kg as declared by the CIL based on loading end results. This grade slippage has a huge financial implication in terms of differential coal cost, Mahagenco claimed. 

Contrary to the general perception about high tariff of Mahagenco plants, the overall Tariff

of MSPGCL as per latest tariff Order is only Rs 3.06 / unit, the power utility claimed. Tariff largely depends on the cost of coal and transportation charges which in turn depends on the distance of the station from the coal mine, the utility stated while claiming that the tariff of 2340 MW Chandrapur TPS which contributes 30% of MSPGCL’s total capacity, is only Rs. 2.59 / unit considering that it is situated closer to the coal mine. This is even less than the NTPC tariff which are predominantly Pit head Stations. The overall tariff of any Generating Utility also depends on the proportion of newer units which tends to push the overall cost up due to the initial higher capital recovery through depreciation and interest cost. 

The tariff of MSPGCL’s recently commissioned Unit of 500 MW at Khaperkheda is Rs 3.72 / Unit. This is much less than the NTPC’s 500 MW unit at Mauda wherein the tariff is Rs 4.86 /unit and is also comparable with the Reliance’s Butibori unit at Rs 3.50/ Unit. The above comparison would make it evident that the MSPGCL’s tariff is very much in tune with the power market, the release claimed.

Admitting that actual overall PLF of Mahagenco’s coal based plants for FY 12-13 is 68%, much below the target level of 80%, the utility blamed it on shortage of coal and claimed that PLF of utilities across the country has shown declining trend due to coal shortage, with the national average of PLF of 69.93% in FY 12-13.