HC seeks Centre's reply on Sasan's plea for more coal

New Delhi: The Delhi High Court today sought the Centre’s response on a plea by Sasan Power Ltd, a Reliance Power subsidiary, for permission to mine coal from its two coal blocks in excess of the 17 MTPA cap to enable it to run its 3,960 megawatt power project in Madhya Pradesh.

The company has contended that if it was not allowed to mine another 2 MTPA, that is up to 19 MTPA, in this financial year, it will not be able to meet the requirements of its Sasan Ultra Mega Power Project (UMPP) that supplies electricity to 14 discoms in seven states including Delhi.

A bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar issued notice to the Centre and listed the matter for hearing on February 7. Sasan has contended in its application that the threat of a shutdown was looming large over the operation of the power project if it was not allowed to mine coal in excess of the cap set by the Centre.

During the hearing, senior advocate P Chidambaram, appearing for the company, submitted that it was an urgent issue as it was running short of coal. The application has contended that the mining of 17 million tonne per annum (MTPA) of coal allowed from its two blocks Moher and Moher-Amlohri blocks in the state was not enough to carry out operations till the end of this financial year.

It has said that the approved quantity of coal would not meet the requirement for running the plant for the last 10 days of March this year, severely affecting 42 crore consumers. Such a situation will also entail a loss of around Rs 130 crore for the company, while the discoms would have to shell out more than Rs 200 crore to purchase power from other sellers to provide electricity to their 42 crore consumers, it has claimed.

The company has said in its plea that it supplied electricity under a 25-year long term power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand. In its application seeking permission to mine 19 MTPA, Sasan has contended that this will also help it to maintain additional stock of coal of 1.25 million tonne for meeting any exigency which might disrupt coal production.

It has also claimed that it exhausted most of its accumulated stock last year to run its plant when it had to stop mining after hitting the 17 MTPA cap. The application was filed in the main writ petition by Reliance Power and Sasan challenging the Centre’s May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.

The government had justified the cancellation saying the unit’s coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension. Sasan project is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore, Reliance has said in its petition.