CEB losing Rs. 300 m. by waiving FAC

The Ceylon Electricity Board (CEB) will stand to lose close to Rs.300 million in revenue after the Power and Energy Ministry decided this week to waive the 30% Fuel Adjustment Charge (FAC) from all religious institutions. The Ministry announced the adjustment to the tariff on Thursday following fervent appeals by religious leaders in Colombo. The decision was taken despite the CEB owing around Rs.29 billion to the Ceylon Petroleum Corporation.

Power and Energy Ministry Secretary M.M.C. Ferdinando told The Sunday Times that after the electricity tariff was restructured in March the CEB was expecting an annual revenue of about Rs. 40 billion.

He said that after a meeting with Ministry and CEB officials a decision was taken to waive the 30% fuel charge to reduce the burden on religious institutions.“The CEB has not been getting any monthly profits since 1994 and we have to pay a fuel bill of Rs.119 billion annually,” he said.

Mr. Ferdinando said that before 2007 the fuel bill was around Rs.25 billion less than what it is now which prompted the Government to replace the block tariff system with a new system in which even though the tariff is increased the price per unit stays somewhat the same.

The new tariff system which has come under heavy criticism from domestic and industrial consumers alike has the potential to more than double the consumer’s monthly bill with the usage of just one additional unit. Mr. Ferdinando said that the consumers will have to bear with these high bills until the CEB is able to complete its Norochcholai and Trincomalee coal power plants and hence be able to significantly reduce electricity tariffs. The power plants which will cost around US $2 billion to build will have an impact on the tariffs not earlier than 2010.

He said the CEB is also losing revenue through its thermal power plant in Sapugaskanda as it costs the CEB around Rs.30 to produce one unit of electricity while hydro power plants could produce one unit at around Rs.1.20.“We generate around 65% of the country’s requirement through our thermal power plants with one litre of diesel producing around four units of electricity,” he said.

He said that it was due to this coupled with the increasing fuel costs that forced the CEB to revise the tariff. Despite being granted the 30% reduction on their electricity bills, religious leaders request the Government to grant the concession to all sectors including domestic consumers.

Jathika Sangha Sabha (JSS) head Ven. Muttettuwe Ananda Thera who has been strongly opposing the recent tariff increases, told The Sunday Times that he was still not satisfied with the Government’s response to his request.“There is no point in increasing electricity tariffs by 800% and reducing it by 30% as it is no concession. It has become like gas prices which are increased steeply and then reduced by a small amount,” he said.

“If the CEB can cut down on its wastage then the people would not have to suffer these big tariff increases,” he said. He said that even though it was the Vesak season most temples have been requested to use electricity sparingly and instead light oil lamps.

He said that the JSS would not stop pressurising the Government until these concessions are granted to all consumers and tariffs brought down to a reasonable level. Meanwhile, many charitable organizations which consume large quantities of electricity every month complain that they have been overlooked by the Government despite the important social services they provide.

Maurice Lord, Secretary of the Board of Management at Maw Sevana, a home for destitute children, told The Sunday Times that charitable organizations had been completely left out of any concessions given by the Government.“We provide a valuable social service and consume a lot of electricity because of the nature of our service but at the end of the month we have to bear an unfair burden through these electricity bills,” he said.