ECONOMYNEXT – The governing law of the Public Utilities Commission of Sri Lanka (PUCSL) country’s power regulator and state-run Ceylon Electricity Board will be changed and a 300 MegaWatt coal plant set up, Prime Minister Mahinda Rajapaksa has said.
“I …propose to amend the Public Utilities Commission Act and Ceylon Electricity Board Act to allow the rapid implementation of projects,” PM Rajapaksa who is also Finance Minister said in a budget for 2021.
“Our target is to ensure that the electricity cost of the consumers and businesses will be reduced, establishing a competitive electricity supply in the region by 2023 through the reduction of the current level of massive expenditure spent on electricity generation.”
The current law governing the CEB encourages competitive bidding for procurements and has somewhat limited the ability of politicians to push expensive plants into the utility, analysts say, but an appeals process has also delayed procurement.
However under cabinet approval any plant could be pushed into the utility.
Procurements under competitive bidding are conducted by a Cabinet Appointed Tender Board, where the utility has some representatives in the technical evaluation committee, and is generally out of the control of the utility, though it has to live with the consequences.
Several procurement decisions had ended up in court.
It is not clear how the new laws will change the status quo.
The Public Utilities Commission of Sri Lanka has had a series of conflicts with power utility over the setting up of liquefied natural gas plants and coal in its planning process.
The utility delayed the introduction of coal plants in its planning process, some industry analysts say, while it was giving priority to setting a coal plant.
The regulatory process has failed to establish cost reflective power prices, while coal plants were delayed.
The utility has also resisted paying high prices to renewable power producers and insisted on competitive bidding. (Colombo/Nov25/2020)