Rs.11 b more needed to finance power subsidies

Monday, 8 July 2013 01:03 -     - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe A top energy expert on Friday noted that despite the Government’s recent electricity price adjustments a further estimated Rs. 11 billion in revenue was needed to finance the announced subsidies. Resource Management Associates Managing Director Dr. Tilak Siyambalapitiya told a seminar on energy conservation hosted by the Ceylon Chamber of Commerce (CCC) that the surcharges announced by the Government when offset by the subsidies, still left a gap of Rs. 11.2 billion. He pointed out that households are given the largest subsidy of Rs. 40.8 billion while religious institutions are given Rs. 1.2 billion in concessions. Industries by contrast are only given Rs. 1 billion and pay the largest chunk of surcharges along with high consuming households. “The surcharges paid by households that consume more than 180 units while not being the highest in Asia are certainly near the top when one leaves Singapore out of the equation. However as coal becomes the dominant player in the future, it is likely that the present generation cost of Rs. 13.74 can reduce to Rs. 9.30 by as early as next year assuming that other costs remain the same,” he said adding that consumers need to be vigilant to ensure that these benefits to the producer trickle down to the consumer. He also emphasised that even though power supply is stable for the next two years, consumers will likely see another cost increase in 2016-2017 that will be mirrored by higher expenses and warned that there could be power cuts in the future. “Despite costs reducing because of coal, such a change comes with consequences. On one hand the environmental results of coal consumption and on the other dependence on one source for power will have to be faced by the country.” Displaying graphs Dr. Siymbalapitiya stressed that consumers protested over Rs. 3.60 per unit increasing to Rs. 5.20 a unit, which narrowed alternatives such as renewable energy that could be as high as Rs. 25 a unit. Touching on regulatory oversights the expert went onto say that the Public Utilities Commission (PUC), which is charged with publishing production costs every six months and giving an estimate, had failed to do so resulting in lack of transparency. “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 onto them,” he explained. 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.