ECONOMYNEXT — Sri Lanka’s state-run Ceylon Electricity Board (CEB) is expected to submit to the country’s public utilities regulator on Thursday February 22 a proposal to slash a power tariff hike made in October 2023.
Power & Energy Minister Kanchana Wijesekara said on Wednesday February 22 that the CEB expects to reduce rates by at least the same rates and percentages it was increased in October 2023: by 18 percent for the domestic and religious sectors, 12 percent for the industries and hotel sectors, and 24 percent for the general purpose and government buildings sectors.
CEB management and tariff department officials had briefed the ministry on the revised new tariff proposal, taking into account costs reduced from capital and operating expenses from the original proposal, cash flow requirements for 2024 and suggestions received from public consultation and stakeholder meetings, Wijesekara said.
CEB Senior Engineers’ Association Media Spokesman Nandika Pathirage said on Wednesday that this was the best decision that can be taken at the moment.
“There was no rain at all on Tuesday. We have to use more oil these days. If you take hydro, together with mini hydro it makes up 26 percent. Solar and wind make up about 6 percent. Solar alone is 4 percent. If we can increase solar by 10 percent, it will be like during the rainy season of November and December,” said Pathirage.
“Thermal is 68 percent. CEB needs cash to run. If we can reduce it further, we’re all ready to consider it in the next quarter. This is a good number we can arrive at now,” he said.
CEB Deputy General Manager Noel Priyantha, whose resignation was announced Thursday morning following a PR scandal, told reporters on Wednesday that, while it does carry some risk, maintenance and repairs deemed non-essential have been postponed to 2025 and 2026.
“We plan to greatly reduce our capital costs and maintenance costs, through which we expect to provide a considerable reduction in tariffs. What we did was push maintenance and repairs to 2025, 2026. There is a small risk there,” he said.
The official explained that a recent reduction in tariffs by a relatively low 3 to 3.4 percent was due in part to costs involved in activities including maintenance work at the CEB’s extensive network of power stations.
“Profits from the November, December rains were carried forward to 2024. We proposed this year’s tariff with that taken into account. We also planned to do several things that we had missed. CEB owns a large number of power stations. The pandemic came, and then the country went bankrupt. Because of the dollar crisis we couldn’t carry out essential maintenance work. This year we have assigned maximum maintenance,” said Priyantha.
The previous tariff proposal was thus sent to the regulator, the Public Utilities Commission of Sri Lanka (PUCSL), taking into account such tasks the CEB could not carry out due to various reasons, according to Priyantha.
“This was why we had to reduce the tariff by an amount as low as 3 to 3.4 percent. Then we held public consultations. Everyone said in one voice to reduce the tariff. The PUCSL as regulator gave us some criteria, to discuss with the government and move a few these things around and reduce loading a big cost for 2024 and defer it if possible,” he said.
“Which meant do the essential things in 2024, and whatever that can be postponed be moved around a bit,” he said. (Colombo/Feb22/2024)