TISL warns of possible manipulations by CEB

Friday, 25 October 2013 02:34 - - {{hitsCtrl.values.hits}}

Transparency International Sri Lanka (TISL) wants the Public Utilities Commission (PUC) not to take into account as production costs any reported losses incurred by the Ceylon Electricity Board (CEB) due to inefficiency and malpractices, when the next revision of the electricity tariff is worked out. TISL said it has learnt that the commission has asked the CEB to submit details of its income and expenditure during the first six months of this year in order to examine whether there is a need for a revision of the electricity tariff. The CEB hopes to submit the report within the next few days. PUC Director General, Damitha Kumarasinghe has been quoted in the media, stating that the commission is expected to make a decision on any revision four weeks from the receipt of the report. CEB incurs loss

In a letter to the Commission, TISL draws its attention to the fact that in the recent past due to the closure of the Noroccholai coal power plant for 55 days, the CEB has incurred a loss of over Rs. 3,800 million. “This loss was not due to any fault of the consumers or any natural disaster but purely because of errors in construction and faulty machinery. Therefore it is not fair to let the consumer burden this loss,” TISL Executive Director S. Rannuge stated in his letter to PUC Chairman Jayatissa de Costa. Quoting the commission’s website and the National Electricity Consumers’ Movement, TISL points out that during the first nine months of this year, due to the rains, the volume of power generated had exceeded the estimated GWh 2800 units and produced power amounting to over GWh 5000 units. It has been estimated that this has resulted in the CEB while eliminating the losses has, in fact, started earning a profit of over Rs. 3 per unit. According to the National Electricity Consumers’ Movement, the CEB earns on average Rs. 18.63 per unit

based on the current tariff. The average cost per unit is Rs. 15.42.Thus the CEB makes a profit of Rs. 3.21 per unit. CEB engineers confirm that on this basis the CEB should have so far made a profit of around Rs. 25 billion. Reasonable tariffs urged TISL states that since the preparation of the electricity tariff based on the CEB’s estimated annual expenditure, it is heartening to note that this year the board has been able to spend less on power generation and distribute power to the consumers. While the main reason for this is the increased rainfall which was unexpected, TISL believes that the CEB has not notified the consumers or the Public Utilities Commission of any details of the settlement of debts while preparing its annual expenditure. “We feel it’s the responsibility and the duty of the commission to let the consumers enjoy this windfall. The Ministry of Power and Energy has already announced that steps will be taken from next January to deduct the fuel surcharge from the electricity bill. However, that concession will mainly benefit the individual and corporate customers that use a larger number of units rather than the small consumer. Taking all these factors into consideration, we urge the commission to revise the tariff in a reasonable manner”, the TISL letter stated. TISL further states that new projects relating to renewable energy are being suspended. Since it is possible to generate power at a lesser cost per unit by this means, TISL requests the commission to solve this legal issue in association with the CEB.