State power minister Mr Manish Gupta recently shot off strong worded letters to his counterpart in the Centre Mr Sushil Shinde and coal minister Mr Sriprakash Jaiswal opposing the restructuring of coal prices.

A look at the coal mix used in thermal power plants of Bengal, both public and private shows how the shift in fixing of coal prices might affect the consumer. Calculations may vary for the old and new plants but in most cases coal input cost would be higher by at least 50%, if the price chart released by the Eastern Coalfields Ltd is any indication.

Most of the thermal plants from Kolaghat to Santaldih or the New Cossipore plant of the CESC use a mix of the earlier B & C grade coal where the price hike ranges between 10% and 132%. For the two categories of C grade coal which is used in large quantity in power plants, the new price has been increased by 71% and 132%.

Coal allocation for power plants under the West Bengal Power Development Corporation reveals that they come under B and C category. According to a power official, the new thermal power plants such as the one at Sagardighi use F category coal where the hike is no less than 28%.

The decision on restructuring was taken by the centre last week to shift from useful heat value in determining coal price to gross calorific value based price mechanism from January 1.

GCV measures the amount of heat released by carbon and hydrogen in coal when it is heated and is an internationally accepted pricing mechanism. However due to the high ash content in Indian coal, the UHV mechanism was followed here which took into account the heat trapped in ash. In Indian coal, GCV is 25% higher than UHV.

The revision of coal prices as per international norms will hike input costs of power utilities for which consumers may have to pay more once the new price is passed on power tariff. The plight of the state power utilities will be even worse. They will either have to step down generation leading to blackouts. Else, the government that prevented the WBSEB from making tariff revision applications to the West Bengal State Electricity Regulatory Commission will have to announce huge subsidy to light up the boilers.

(Sourced from timesofindia.indiatimes.com)