Power and Energy Minister Kanchana Wijesekera defends decision to increase electricity tariffs, citing spendthrift generation plans and unsuitable policies adopted by successive governments pushed for the inevitable upward adjustments.

Power and Energy Minister Kanchana Wijesekera yesterday in Parliament defended the decision to increase electricity tariffs, citing spendthrift generation plans and unsuitable policies adopted by successive governments pushed for the inevitable upward adjustments.

Speaking during an adjournment debate on electricity tariff hike, he pointed out that electricity users would not have been shocked if timely revisions were implemented from time to time, whilst diversifying the power generation mix with cost-effective and renewable sources.

“Tariff hike was inevitable. It has been implemented with the maximum possible subsidies for groups utilising least electricity,” he said.

The Public Utilities Commission of Sri Lanka approved the Ceylon Electricity Board’s (CEB) request to increase electricity tariffs by 75% on average for all categories from 10 August. This cost-reflective price revision was implemented after nine years.

Minister Wijesekera pointed out that despite the CEB’s request for projected revenue of Rs. 869 billion from the tariff hikes, the electricity regulator had only approved over Rs. 500 billion.

“The CEB needs to pay Rs. 76.8 billion to private power plants and Rs. 29 billion for renewables including rooftop solar. It also owes Ceylon Petroleum Corporation Rs. 31 billion,” he revealed.

Sri Lanka’s total electricity users at present are 7.8 million, 6.7 million of which are domestic users, 1.1 million are general purpose users, and 1.4 million use below 30 units per month. A total of 1.7 million using 90 units, while 4.8 million use below 90 units each month.

As per the tariff revision, for the least usage of up to 30 units, the CEB has been allowed to increase by 264%, whilst for the usage of 31- 60 units was increased by 211%.

“Though the price hike percentage seems a lot, in terms of value it is not that high. Electricity users who utilised 30 units a month earlier spent Rs. 105, with the tariff hike it went up to Rs. 360. But is there anyone who cannot pay Rs. 360 for monthly electricity bill? Even for a loaf of bread we pay Rs. 200 on a daily basis now,” he argued, noting that to supply at Rs. 360, the Government spends around Rs. 1,500.

Minister Wijesekera pointed out that the tariff hikes for religious places were also raised despite the heavy criticism from the clergy.

“Of 46,682 religious places, only 15,195 consume below 30 units. Up until the tariff hike, they have only spent Rs. 87 for electricity per month. However, with the tariff hike, they will have to pay Rs. 330 monthly,” he said.

He also justified the 900 MW Norochcholai coal power plant despite the breakdowns encountered since it was commissioned in 2011. “If the Norochcholai coal power plant was not built then the country would have faced the worst issues today,” he said.

The Power and Energy Minister also proposed setting up a new Parliamentary Select Committee to monitor irregularities in the fuel procurement processes. He said the Committee should be chaired by a member of the Opposition, whilst nominating Independent MP Champika Ranawaka as the best suited for the post.

“MP Ranawaka continues to make statements that he has contacts who can bring in sufficient fuel capacities at a lower price range. I will extend my fullest support as the subject Minister for it,” Wijesekera said.

On 18 August, the Power and Energy Minister complained to the Criminal Investigation Department (CID) to investigate irregularities in the CPC and CPSTL activities.

He requested the CID to investigate the procurement of fuel, evaluation of proposals, non-placement of orders, investigations into the selection of suppliers, delays in payments, irregularities in distribution, and various allegations levelled by individuals.

Courtesy:Daily FT