Power and Energy Minister Kanchana Wijesekera yesterday said the Ceylon Electricity Board will be compelled to impose six to eight-hour-long power cuts daily if the proposed tariff hike is not approved.
Making a special statement in Parliament yesterday, he categorically rejected claims made by the Public Utilities Commission of Sri Lanka Chairman that the proposed electricity tariff hike is to recover previous losses of the CEB.
“The tariff revisions were not proposed to recover past losses as claimed by some opposition members and the PUCSL Chairman. The prevailing two-hour and 20-minute daily power cuts are despite hydro and coal generation running at maximum capacity. Fuel and furnace oil must simply be used to meet the remaining demand,” he explained.
Minister Wijesekera claimed that the tariff hike approved by the PUCSL in August this year was not adequate to cover losses.
“Last year’s generation cost was Rs. 800 billion, but the PUCSL approved a tariff revision that covered only Rs. 500 billion of it ─ again, after nine years.”
This tariff revision should occur every year, and the CEB did it once or twice a year until 2009,” the Minister said criticising the PUCSL for failing to take the initiative.
He also noted that the proposed electricity hike under two stages next year is to ensure an uninterrupted power supply.
“Now the average charge is Rs. 29.14 per unit. The production cost of a unit of electricity is estimated to be around Rs.56.90 and there is a gap of Rs. 27, which amounts to Rs. 423.5 billion loss for the CEB, which must be paid by either the Treasury or by the public via direct or indirect taxation,” he said.
Minister Wijesekera, therefore, said to cover the losses and pay for the electricity purchased from private power plants it was critical to increase the tariff.
“The CEB owes Rs. 70 billion to private power suppliers for power generated in the past 12 months and Rs. 40 billion for renewable suppliers. The plan is to have a cost-reflective tariff that will allow us access to bank facilities to finance those due payments.
“If these wind, solar and mini-hydro suppliers halt their supply, we will be in a worse situation. I do not think any politicians here will want that,” he stressed.
Minister Wijesekera also said that most CEB unions and senior management agree that a revision is needed, but some of them are using it as a slogan vowing not to allow a tariff increase.
“This is only because we have proposed a CEB restructure,” he added.