Tuesday, 9 July 2013 00:26
-
- {{hitsCtrl.values.hits}}
MUCH has been written and talked about regarding power prices in Sri Lanka. Most experts and the masses in general agree that there is need for better management of electricity generation in the country, but few know that provisions accommodating this are often overlooked.
At a recent seminar organised by the Ceylon Chamber of Commerce, a power exporter pointed out that the main reason generation details are not available to the public is because the Public Utilities Commission (PUC), which is tasked with acting as an independent watchdog, does not publish the data every six months as demanded by regulation.
Resource Management Associates Managing Director Dr. Tilak Siyambalapitiya touching on regulatory oversight went on to say that the PUC, which is charged with publishing production costs every six months and giving an estimate on generation for the next half year, had failed to do so resulting in lack of transparency.
He explained that despite regulations dictating that data on electricity production be published every six months so that the public can be aware of the cost, not even quality of supply data is published. The last data published was for the first six months of 2012. If such data is available, the public can be aware of the gains made during the rainy season and how the saving can be passed on to them.
Regulations governing the PUC stipulate that the types of power generation in the country, namely coal, hydro and thermal, along with their respective costs, are gathered together and presented to the public. In this way the bill payers can have an idea of how power is generated, what the costs are and whether it is justified. It also means that during a rainy season costs would be reduced and that benefit can be passed on to the consumer.
A six-month estimate would give the chance for consumers to understand the cost and be prepared to tighten their belts. Financial transparency and accountability are essential in an industry that is not only expensive to everyone but also affects the entire population. The fact that people who are tasked with creating awareness do not make the necessary information available leaves room for malpractice. For example, experts have pointed out that excessive use of hydro during pre-drought periods could have exacerbated the need for power cuts while breakdowns in turbines could have reduced the output possible from hydro in previous months. All this costs the consumer.
Siyambalapitiya’s prognosis for the energy sector is that the current generation cost of Rs. 13.74 a unit can reduce to Rs. 9.30 due to the industry’s transition to coal. However, without transparent data that can be analysed independently, it will be impossible to ensure that this reduction is passed on to the consumer. Thus the consumer not only has to pay ever-increasing bills, they also have to foot the costs for loans to build the power plants.
Another point is the suspect power purchase agreements that are often signed behind closed doors, resulting in consumers having to pay the price – literally.
Defending the PUC, its General Operations Deputy Director Harsha Wickremasinghe weighed in with the point that the process was cumbersome and time-consuming, which resulted in the delay of data publication. However, he admitted that lacking sufficient data undermines the reforms that the PUC pledged to make as part of the recent price increase. It would seem that a little bit of financial accountability will have the deepest result in this monopoly.
