Amendments to Electricity Act face stiff opposition

Saturday, 3 August 2019 00:01 - - {{hitsCtrl.values.hits}}

Members of the Sectoral Oversight Committee object to some amendments
Amendments seek to remove some powers of the PUCSL and interest payment for customers’ deposits held by the licensees

By Chathuri Dissanayake

Proposed amendments to the Electricity Act 2009 are being pushed back by the stakeholders with the Sectoral Oversight Committee on Energy objecting to the changes set to be presented in Parliament on Tuesday (6 August).

The amendments to the Act affect the deposits charged by the licensee to connect to the grid, approvals given by the Public Utilities Commission, and feed-in tariff rates paid to non-conventional renewable energy resources.

However, the amendment to the bill is set to be presented in Parliament on Tuesday.

“We have objected to some of the clauses, and we will give our observations during the debate. We are hoping this will be taken to consideration,” Member of the Committee Prof. Ashu Marasinghe told Daily FT.

The amendments come following the approval given by Cabinet to change the Electricity Act to facilitate rooftop solar, which was being held back as the existing legislation requires competitive bidding for every case.

However, the proposed amendments will also affect other aspects of the Electricity Act, including powers vested with the PUCSL which have been opposed by the Sectoral Oversight Committee as well as other stakeholders.

During Sectoral Oversight Committee meetings held this week, members had opposed the amendments, with Non-Cabinet Minister Harsha De Silva making strong objections to removing powers of PUCSL to approve power purchase agreements signed for emergency purchases and government-to-government contracts.

Instead the Cabinet will be required only to obtain the observations of the PUCSL.

“The observations can be taken into consideration or not, it is not like giving approval,” one power sector analyst, who declined to be named due to current work commitments, said, speaking against the move.

The amendments also seek to do away with the laws which require the utility provider to pay an interest for the deposit taken from them to provide connectivity. During the Sectoral Committee meetings, discussing the amendments, stakeholders had spoken against the move, noting that the licensees also charge interests from the customers when payments are delayed.

Critical of the amendments brought forward, analysts noted that sweeping changes to the Act affecting powers of the regulator should not be brought in the guise of facilitating renewable energy.

The amendments come hot on the heels of the Attorney General refusing to issue a generation licence to the Ceylon Electricity Board (CEB) for the purchase of electricity from a 400 MW power plant installed on a Turkish ship, citing several procedural defects.

The procurement, which had been approved by Cabinet, did not follow competitive tender procedure.

In refusing the general licence, the AG had noted the failure to follow a tender procedure and that the Government did not own shares in the power plant, which is a requirement under the Act.