Expert: Electricity rates need revision

Energy Consultant Dr. Tilak Siyambalapitiya has said there has to be an immediate electricity tariff hike of 32 per cent, on top of the 30 per cent hike already implemented last September.

Addressing an expert panel discussion on “Realisation of Affordable Electricity” at the AGM of the Electrical Engineering Society held at the Hatton National Bank auditorium, Dr Siyambalapitiya said even with Lankans already paying some of the highest prices for electricity, the electricity supplier - CEB - is running at a massive loss.

With Sri Lanka depending on oil for 60 per cent of the electricity supplied, the fuel costs alone would average to about Rs. 8.12 per kwh. In addition, for each kwh there is a capital related cost of Rs. 2 (except for renewable power). Then there is a 16.5 per cent loss in the network, due to theft and technical reasons.

“When all these costs are added, electricity costs about Rs.14.30 per kwh. Thus the prices paid by most households and all industries are not sustainable and would have to go up from the present average rate of Rs. 10.50 per kwh,” he said.

While conceding that with the three proposed coal power plants at Norochcholai (900 mw), Trincomalee (500 mw) Hambantota (600 mw) and the hydro-power plant at Upper Kotmale (150 mw) coming into operation would bring down production costs considerably as they take over base load duties in the generating system, presently served by oil burning power plants, Dr Siyambalapitiya said that till such time, electricity prices would go up further in real terms.

“The strategy should see the share of electricity produced by oil dropping from the present 60 per cent to less than 10 per cent by 2015. The share from small renewables will rise from the present four per cent to ten per cent by the same year. Network losses should be reduced to 12 per cent well before 2015,” he said.

The chief guest on the occasion was Power and Energy Minister John Seneviratne. Ministry Secretary M.M.C. Ferdinando, CEB Additional General Manager (Transmission) and Ranjith Gunawardane and Srilal Miththapala, representing major industrial electricity consumers also spoke.

It was, however, not clear when the Government would implement this steep revision in the electricity tariff or whether it will absorb it. Both the Minister and the Secretary could not be contacted at the time of going to press.