CEB Tariff increase
Posted on December 29th, 2022

Sugath Kulatunga

Minister Kanchana Wijesekera insists on a CEB tariff hike in January of about 60% to 65%. Already there has been a steep increase of the electricity tariff and the proposed increase above the present increase will heap more burdens on the consumer who is finding it difficult to make ends meet. One cannot object to a level of tariff which covers the actual cost. But CEB should share with the public the breakdown of the cost. That cost should not exclude the cost of inaction, corruption and mismanagement of the CEB. It cannot disregard the cost of cancelling the Sampur project which was a joint venture with the Government of India and was in the final stage of being implemented. The loss on the delay in activating the Kerawalapitiya plant and the scam on the New Fortress deal should not be discounted.

More importantly the cost breakdown cannot disregard the delay in entering into power purchase agreements or not approving renewable energy projects with a capacity of a total 4080 MW, which includes hydro power project with a capacity of 580 MW not approved for 6 years, wind energy projects of 769 MW, solar power generation projects of 2538 MW and biomass projects of 196 MW. This has been done when mini hydro energy costs Rs 4.97 per unit and renewable energy only 16.90 per unit of electricity whereas a unit of electricity generated with fossil fuels costs over Rs 60 per unit.” (Speech of Minister Kanchana Wijesekera at Column 436 of the Hansard of June 9, 2022)

CEB claims that we have exhausted the prospects for more major hydroelectric projects. One wonders whether they have examined the potential in run of the river projects.  There are run of the river projects in operation in many countries in Asia. USA is a leader in ROR projects with projects like Chief Joseph dam with 2620 MW and Dalles dam with 1878 MW. World Bank Group support for Hydro electric projects between 2003–2008 was 48% for ROR rojects. https://documents1.worldbank.org/curated/en/846331468333065380/pdf/490170NWP0Box31directionshydro

The delay in approving renewable power generation projects had been due to a provision in the Renewable Energy law that projects must be selected through a tender procedure. The question is why this provision was not amended from July 2013 when the Attorney General pointed out the constraint.

 It seems that there were others than the Diesel mafia who benefitted from shutting out renewable energy projects.

In fixing the subsidized tariff of Rs 8 for consumption below 30 the alternate cost of kerosine oil lamps should have been taken into account which is Rs 365 per liter.

Sugath Kulatunga

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