The electrical distress

In a highly unpopular move, last Friday, the power regulator – the PUCSL – gave the nod for another round of electricity tariff hikes. With the recent price increases in water, fuel, and cooking gas, no doubt the general public would be feeling furious about the CEB’s move to raise power charges. 

Following the tariff revisions, industrial customers will experience around 12% increase in their electricity costs. It would be a setback for the industrial sector given the sluggish demand in the domestic market as well as the falling export incomes. 

Market-pricing energy is one of the conditions stipulated by the IMF deal in order to prevent the burdensome State entity incurring losses that had been previously financed by the two State banks. What is noticeable in the tariff revision is that religious and charitable institutes are charged extremely low rates compared to households. Although households using above 180 units of energy are compelled to pay Rs. 89 per unit, religious places have to pay only Rs. 59 for the same category of usage. It is obvious that prominent religious leaders use their political clout to obtain numerous benefits and favourable electricity charges are one of them. It would be in the best interest of places of religious worship to buy solar power panels considering their high usage levels.

The conduct of the CEB has been in the spotlight over the last few months. The shortcomings and irregularities within the State enterprise have definitely aggravated the woes of electricity consumers. As the CEB is a monopoly, there is no attempt by its top management to reduce wastage and increase productivity. The power of trade unions within the Board is a major impediment which blocks reforms that aim to make it a productive entity. As this column has described on numerous occasions, the Electricity Board is one of the many SOEs that function with the prime objective of enriching its employees at the expense of taxpayers. It is well known that the CEB is an institution which is associated with rampant corruption and financial leakage. Many have accused that top officials of the electricity monopoly have become extremely wealthy due to procurement of emergency power. 

Since 2011, the Sustainable Energy Authority had proposed over 700 wind and solar power projects, but none of them had been undertaken by the CEB. The non-implementation of renewable energy-based power generation projects have enabled the top officials of the Board to carry out emergency power purchases, that offer the opportunity to earn money through illegal means. Last year, a Government MP pointed out that more than 50% of the 1,600 vehicles which are used by the CEB are ones which are hired from its own employees which include engineers. Most of the engineers in this institution received their education from taxpayer-funded public schools and universities, and it is agonising to observe the selfish conduct of some of its engineering professionals.

Wastage and improper conduct are not only confined to top layers in the SOEs, rather it is observed in almost every layer of State enterprises. Claiming overtime by attending workplaces on Saturdays in spite of not doing any meaningful work is a typical practice by low-level workers in the SOEs, and the minor CEB employees are no exception. The plight of electricity consumers has not been helped by the politically motivated protests against low-cost power generation projects either. In 2017, plans to establish a LNG power plant in Sampur (to which there was huge opposition by the JVP) were shelved by the lacklustre former President Maithripala Sirisena.

As part of power sector reforms, recommendations have been made to divide the State-owned electricity utility into 14 companies in order to take over the generation, transmission, distribution, and sale of electricity. Such measures together with breaking up the monopoly in the electricity sector are absolutely necessary to liberate consumers from this corrupt and inefficient State enterprise.