Power Ministry grants special permission to pay ACE Embilipitiya sans PUCSL approval

Saturday, 21 July 2018 00:10 -     - {{hitsCtrl.values.hits}}

  • Bill for April totalling Rs.850m settled by CEB
  • CEB says purchase from ACE necessary to avoid power outages to south
  • Secretary says power purchases from retired plants against Electricity Act but grants approval
  • Unions accuse management of misleading Cabinet to obtain approval
  •  CEB Engineers union advices membership to not get involved in transaction citing legal issues


By Chathuri Dissanayake

The controversy over power purchases from ACE Embilipitiya deepened this week, with the Power and Renewable Energy Ministry granting special approval to the Ceylon Electricity Board (CEB) to make payments for outstanding bills since signing the agreement in April 2018.

After receiving the approval from the Ministry Secretary Dr. B.M.S. Batagoda, the CEB has made a payment of Rs.850 million for purchases during the month of April, CEB Spokesperson Sulakshana Jayawardana confirmed to Daily FT.

Representatives from ACE Power Embilipitiya was not available for comment.

The CEB General Manager in a letter to the Secretary on 17 July, seen by Daily FT, requested special approval to make payments to the power supplier as the Public Utilities Commission of Sri Lanka (PUCSL) had not approved the power purchase agreement signed in April. The agreement was signed for purchase of emergency power up to 100MW for threeyears following Cabinet approval.

The Secretary, replying the letter on the same day, granted CEB approval to pay the power supplier, noting that the priority of the Government was to ensure uninterrupted power supply to avoid serious socioeconomic repercussions.

However, the Ministry Secretary notes that the “Sri Lanka Electricity Act does not provide provisions for extensions of existing Independent Power Producers (IPPs)”. Further the Secretary has also instructed the CEB to provide “full justification to the PUCSL for obtaining approvals for all three retired thermal power plants since the policy of Government is to use private investments through IPP to generate electricity”.

“We can pay attention to the regulations but then we will have huge socioeconomic costs to incur as the loss of this supply will put a strain on power supply to Southern region,” Jayawardana said, insisting that the purchase agreement was more beneficial than opting for purchases on urgent basis at high cost.

“Besides, we have Cabinet approval and this is also included in the long-term general plan of the PUCSL,” he insisted.

However, the decision has been criticised by the former Deputy General Manager (Energy Purchases) Sujeewa Abeywickrama in a letter addressed to the Assistant General Manager (Transmission). The letter was written while Abeywickrama was still in office. Abeywickrama was later removed from post pending an inquiry. Last week he alleged that the management removed him from the position as he refused to make the payments.

Raising legal issues that may rise from the transaction, the CEB Engineers’ Union also advised its membership not to get involved in making payments to ACE Power. In a letter to CEB General Manager, the Union said: “Considering apparent risks to our members, please be informed that the EXCO unanimously decided to instruct relevant members of the CEBEU not to get involved in making payments to Ace Embilipitiya Power Plant for the energy purchased after 51h April 2018 until legal impediments for the same are cleared.”


CEB Workers› Union Secretary Ranjan Jayalal, too, found the agreement problematic, saying that there was no need to sign a three-year-long agreement when the drought has ended. 

“The purchase agreement was signed in anticipation of prolonged drought. They have misled everyone and gotten approval, but the PUCSL has not approved it. How can you go ahead then when the regulator has not approved it?” he questioned.