New norms for coal blocks not to raise power tariff: Government

NEW DELHI: The new legislation on coal block allocation will not lead to higher electricity tariff for consumers, instead the prices could come down, Power and Coal Minister PiyushGoyal informed LokSabha today.

"Power tariff will not go up. Power sector is a regulated sector. Reverse bidding auction will happen...Prices will fall," he said replying to a debate on the Coal Mines (Special Provisions) Bill, which replaces an Ordinance promulgated in October. The bill was later passed by the House.

Goyal said ever since NDA came to power, coal production rose to 7.5 per cent and power generation from coal-based plants has shown 21 per cent growth.

He said the new legislation would ensure opening of some coal mines under public sector Coal India and new mines to be auctioned would use better technology to extract coal in a scientific manner.

The Minister said these factors would pave the way for higher coal output and lower production cost and ultimately benefit the country's power sector.

The bill, which replaces an ordinance, was brought in the wake of the Supreme Court order cancelling the allocation of 204 coal blocks on September 24 and resetting the agenda for their allocation.

The ordinance was promulgated in October to facilitate auctioning of the cancelled coal blocks. In the first round, 74 blocks are to be auctioned by the government.