• Employees Union says Rs. 121 b saved just in 2019 
• Gives detailed list of rejected power proposals and breakdown of funds saved since 2016
• Says some proposals were in contravention of Electricity Act or did not adhere to least cost principle 
• At least two proposals were to run for 10 years, including for diesel power and barge mounted plants

The Employees Union of the Public Utilities Commission of Sri Lanka (PUCSL) yesterday said the power regulator has saved Rs. 571 billion of public funds over the last four years by not approving unnecessary emergency power and non-long-term power purchases, including Rs. 121 billion in 2019. 

Issuing a press release, the union pointed out that from 2016-2020, the Commission received 16 proposals seeking approval for the purchases of 1,841 MW of emergency and non-long-term electricity. 

“Of these, 14 proposals have been rejected outright. Although the Ceylon Electricity Board (CEB) had given initial approval for two proposals, the CEB did not take the necessary steps to get the approval for the Power Purchase Agreement in relation to those proposals,” the union stated. 

“The Commission has saved the public about Rs. 121 billion in 2019 alone by not approving emergency purchases. Last year alone, the request to purchase 600 MW of power from diesel power plants on an emergency basis was rejected by the Commission as it was unnecessary,” the Employees Union stated, arguing that the PUCSL’s rejection of the emergency purchase proposals was correct since there were no scheduled power cuts since 2019. 

According to the union, nearly Rs. 206.04 billion was saved when two proposals made on 11 and 15 November 2019 by the CEB were rejected. A proposal to purchase 24x4 MW from diesel power plants for 10 years from 2021 had not received approval by PUCSL by 30 December 2019 as the CEB had failed to resubmit the proposal according to the Electricity Act as requested by the Commission. 

The CEB had sought PUCSL preliminary approval for a proposal to purchase emergency power from a 100 MW Diesel Power Plant for 10 years from 2022 which had been made on 15 November 2019, one day before the Presidential Elections. Again, the CEB had failed to comply with a request by the commission to resubmit the proposal in accordance with the Electricity Act, the Employees Union stated. 

The union also released details of a slew of proposals by the CEB to purchase power that was not approved by the Commission during the 2016-2020 period. These included  55 MW of emergency power for three months submitted to the Commission for preliminary approval on 5 April 2016 and it was not approved on 22 April 2016 as there was no requirement for emergency power, proposal to extend the Power Purchase Agreement for one year for the purchase of 20 MW Emergency Power at ACE Matara Power Plant for one year made on 13 February 2017 was not approved by the Commission as it has submitted violating Section 43 (2) of the Sri Lanka Electricity Act, and a proposal to extend the Power Purchase Agreement of ACE Embilipitiya Power Plant for one year for the purchase of 100 MW of Emergency Power made on  17 March 2017 that was rejected by the Commission as it had violated the Section 43 (2) of the Sri Lanka Electricity Act. 

In addition the union said a proposal to purchase 100 MW of electricity from a barge-mounted power plant in Galle for 10 years made on 16 March 2017 without obtaining the approval for Request For Proposal (RFP) from the commission was rejected, as was an approval for a proposal to purchase 300 MW of emergency power for 30 months from February through a Barge Power Plant in Colombo that was made on 19 August 2019. 

However, the PUCSL had not received sufficient information to justify compliance with the least cost principle in terms of Section 43 of the Sri Lanka Electricity Act and to ensure the feasibility of commissioning the power plant within the expected period. Due to those reasons, the request was not approved by the Commission, the union stated. 

The Employees Union also pointed out that had the PUCSL approved the extension of power purchasing agreements of five power stations during 2017-2018, it would have resulted in Rs. 58.86 billion being paid to the power plants per year. 

“This saving from non-approved ad hoc emergency power and other proposals is about 60% of the proposed spending on the healthcare sector in the 2019 Budget. The savings is Rs. 8.60 per unit (of power),” the union stated. 

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