Sri Lanka, May 18 -- Chairman of Public Utilities Commission of Sri Lanka, Janaka Ratnayake emphasized that there is a possibility of reducing electricity tariffs by 27 percent.
The Ceylon Electricity Board (CEB) has submitted a proposal to reduce the tariffs by only 3 percent.
The PUCSL has informed the CEB to submit the correct data to reduce the electricity tariffs in per the actual cost reduction.
"The electricity tariff was increased by 66 percent this February based on fake data. At that time, the tariff should have been increased by only 35 percent," Ratnayake said while addressing a press conference today.
"In the last tariff revision, we pointed out that the electricity demand of 16,550 gigawatts estimated by the CEB was incorrect. Our estimate was that electricity demand this year would be limited to 15,050 gigawatt hours."
In April, he said the CEB realized that our estimate was correct and that their demand was overestimated. Accordingly, they informed in writing that the estimated demand for the coming period of the year is 15,264-gigawatt hours.
Ratnayake also points out that if electricity tariffs were set and implemented according to his estimates, the situation electricity consumers are facing today would not have arisen.
"Compared to the decrease in electricity demand, the cost of providing electricity should also decrease."
The CEB initially estimated an expenditure of 392 billion rupees for the period from July to December but the CEB now says that 285 billion rupees will be spent for the next 6 months.
According to the PUCSL calculation, the actual cost of electricity supply will be reduced by 107 billion rupees.
If that is the case, Ratnayake says the electricity tariff should be reduced by at least 27 percent as a whole for the upcoming period.
"Otherwise, by reducing tariffs by 3 percent only for a limited number of customer groups based on fake data, will not do the justice for all electricity consumers. Also, the CEB would not get the expected income."
In a revision of electricity tariffs, all the proposals should be submitted in accordance to tariff methodology (equation) approved under the Sri Lanka Electricity Act. According to methodology only the reasonable cost of supplying electricity can be charged from the electricity consumer.
Ratnayake pointed out that contrary to the approved method, CEB is trying to implement the tariff revision proposal even this time, by including proposals to recover the loans received by CEB from the electricity consumers.
"According to the tariff methodology, all data should be submitted correctly. Only approved costs recoverable from the customer can be included in the total cost. But this proposal has not been submitted with the data approved under tariff methodology."
In calculating charges based on cost, the charges should be adjusted in such a way as to recover the actual and minimum cost.
For example, Ratnayake says although the market price of a liter of naphtha is 220 rupees, the price of a liter of naphtha purchased for the Kelanitissa power plant has been calculated as 266 rupees. Then the unit cost will be 69 rupees 53 cents.
Moreover, if this plant use diesel to generate electricity, the unit cost will be reduced to 68 rupees and 14 cents per unit. But the estimate has been calculated using naphtha.
Calculating electricity charged based on high cost is against the Electricity Act.
The CEB has been informed to share the corrected data, Ratnayake said and he further pointed out that energy supply can play a big role in order to quickly activate the economic condition of the country.
"When the burden of electricity and fuel is heavy, it affects not only the average consumer but also the industrialist."
Fuel demand decreased due to high fuel prices. Demand for electricity has decreased due to high electricity tariffs.
Energy should be provided at a reasonable price and which will uplift the economy as a whole. The prices should be brought down fairly and immediately.
Fuel prices have gone down in the world market. The exchange rate is better than last year. Since there is an opportunity to provide relief for people given the changes in the market, the energy prices should be reduced based on the actual cost.
After submitting the necessary information related to the tariff revision proposal presented by CEB, we have planned to hold a public consultation on the electricity tariff revision proposal and take the final decision based on the opinions of the people," Ratnayake said. Published by HT Digital Content Services with permission from Lanka Business Report. For any query with respect to this article or any other content requirement, please contact Editor at firstname.lastname@example.org