The proposal to setup a independent authority for the coal sector has been cleared by a Group of Ministers (GoM) today. This regulatory authority addresses contentious issues like pricing, supply and quality of coal.
The GoM consists of Environment Minister Jayanthi Natarajan and Planning Commission Deputy Chairman Montek Singh Ahluwalia and Coal Minister Sriprakash Jaiswal.
The Coal Regulatory Authority Bill will be moved to the Cabinet within ten days for its approval.
According to the Power Minister Scindia the bill will balance and protect the interest of all stake holders and at the same time gives a very judicious balance to the Regulatory Authority to be able to supervise the supply and demand of coal in the country.
The GoM has also resolved the issues on Pass-through Mechanism structure. A pass-through mechanism means that the price charged from electricity distribution companies will absorb the rising cost instead of being cross-subsidised by pooling of or absorbed by the power-generating companies.
The GoM had also settled the issue of fixing the prices saying that it will continue to be vested with the producers but not the regulator. But, the regulator has the power to resolve disputes including those arising out of fuel supply agreements (FSAs).
All the disputes relating to price, quality, supplies will be adjudicated with the regulator and then there will be an appellate authority.
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