Shinde wants CERC to be the coal regulator too

* Urges Coal Minister Jaiswal to seek law ministry opinion

Written by Priyadarshi Siddhanta | New Delhi | Published: April 5, 2012 1:06 am

In a move that will intensify the turf war between the power and coal ministries,Power Minister Sushilkumar Shinde has suggested that the Central Electricity Regulatory Commission (CERC) be allowed to discharge functions of the proposed coal regulator,that has been in the limbo for three years now. In a letter to Coal Minister Sriprakash Jaiswal,he said the views of the law ministry may be sought to ascertain if the power regulator can double up as a coal regulator too.

Shinde’s March 23 letter says that a coal regulator be put in place at the earliest to give due impetus to mining activities. “Setting up the regulator needs to be expedited. It should be empowered to decide on issues including reasonable returns on investments and reimbursement of transportation cost incurred for transporting the mined fuel. Till a regulator is set up,the CERC should be asked to decide on the issues. Authorising CERC must be done at the earliest in consultation with the law ministry,” Shinde said in his letter to Jaiswal.

Officials in the coal ministry,however,dismissed the proposal. A similar suggestion was made by the Central Electricity Authority in 2008-09,but not pursued. When contacted,Planning Commission Member (Energy) BK Chaturvedi told The Indian Express that deciding on returns on investment,pricing and related issues are not CERC’s core areas of competence. “I think they are looking for short-term answers to a critical issue. It is more of an expression of anxiety from the power ministry. It would call for extensive deliberations and due diligence,before CERC is empowered to do so.”

The coal ministry had moved a note for the Committee of Secretaries on the need for setting up a coal regulator way back in 2009. But consensus eluded on the modalities and nature of the proposed regulator. In March this year,the ministry proposed to the Cabinet the setting up of a regulator with powers to allocate/ deallocate blocks and fix prices. The Cabinet is yet to discuss the proposal.

In his letter,Shinde said the current policies of the coal ministry tend to regulate the fuel’s production rather than increasing the output. Referring to a clause of the coal ministry’s policy on disposal of surplus,the minister said “allocatees are encouraged to produce only such quantity of coal or by-products as they may be able to utilise in their linked end-use plants”. This meant that the production is being regulated and not increased.

“Considering that there is paucity of coal for the power sector and the current levels of production is highly inadequate vis-a-vis demand,it would be desirable to design the policy that aims at augmenting production,” Shinde argued.

He also opposed the coal ministry’s proposal to dispose surplus coal through e-auctioning given a shortfall in availability and Coal India Limited has not been able to execute Fuel Supply Agreements.

Shinde,however,concurred with the coal ministry that all surplus coal production should be transferred to the nearest subsidiary of Coal India. But it would be useful if the mode of transfer and the price payable is stated upfront either in this policy or though a separate government order rather than on a case-to-case basis.

Turf war intensifies

In a letter to Coal Minister Sriprakash Jaiswal,Power Minister Sushilkumar Shinde has suggested that a coal regulator be put in place at the earliest to give due impetus to mining activities

Officials in the coal ministry,however,dismissed the proposal. A similar suggestion was made by the CERC in 2008-09,but not pursued

Planning Commission Member (Energy) BK Chaturvedi told The Indian Express that deciding on returns on investment,pricing and related issues are not CERC’s core areas of competence

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