On 6th October 2017, the Maharashtra Electricity Regulatory Commission (MERC) vide its order in case no 135 of 2017 allowed the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) to procure around 1000 MW of short-term power at higher cost than the ceiling rate of Rs. 4 per unit that the commission had set for such procurement about a year ago. The reason for this was that MSEDCL claimed that around 6600 MW of its contracted capacity was unavailable due to coal shortage. As a result of this, MSEDCL was also forced to undertake distress load shedding in the state. Out of MSEDCL’s total contracted capacity of 33,496 MW, more than one-third belongs to Maharashtra State Power Generation Company Ltd (MSPGCL) and more than 60% of MSPGCL’s coal based capacity was unavailable during this period. It is important to note that the claims regarding coal shortage made by MSPGCL are contrary to the public statements made by the Ministry of Coal regarding coal availability and the data published by Coal India Ltd (CIL) regarding coal production and supply. Hence, it becomes important to evaluate whether the coal shortage claimed by MSPGCL and some other generators in the state could have been avoided by better planning.

Therefore, in order to bring in more clarity regarding coal procurement and generation planning processes, Prayas (Energy Group) has filed a petition before the MERC seeking a thorough analysis and examination of the reasons leading to sudden fall in availability of MSEDCL’s contracted capacity during September 2017. Prayas has demanded that the MERC should undertake such analysis based on data such as actual indents issued by MSPGCL to the concerned coal companies for coal requisition, coal supplied by CIL against such indents, and the details regarding how MSPGCL is utilising the coal supply contracted for its capacity (4522 MW) that is under planned economic and/or reserve shut down.

Prayas has submitted that the crisis like situation that emerged in September 2017 should be used as an opportunity to thoroughly evlauate generation planning and coal procurement processes in the state. Based on this analysis and to avoid such issues in future, the Commission should consider issuing specific process directions to the concerned companies. The petition is yet to be listed for hearing before the Commission.