Demand for electricity drops : Treasury

Electricity demand fell  by 22 per cent during the first four months of this year after the tariff was increased, according statistics of the  Ceylon Electricity Board.

Also the CEB incurred an operating loss of Rs. 29.79 billion (Rs 29,797 million) due to the delayed tariff increase being inadequate to fully compensate for the significant increase in generation cost, a report from Treasury said.

According to Mid-year Fiscal Position Report -2023 released by the Ministry of Finance, Economic Stabilization and National Policies the cost per unit at the selling point also has considerably increased to Rs. 47.44 per kWh during the first four months of 2023 against Rs. 26.95 per kWh last year.

The total outstanding obligations of CEB to Ceylon Petroleum Corporation (CPC) and Independent Power Producers (IPP) have increased to Rs. 216.92 billion as

of the end of April. “The Independent Power Producers, mainly in the Renewable

energy sector have faced severe financial difficulties due to non-payment for their electricity produced by the CEB,”

However, with the government policy decision to transfer the outstanding loan balance of Rs. 214.7 billion (USD 591.4 million) as of the end of December last year obtained for the construction of the Norochcholai power plant into the Government Books of Accounts and to convert the debts amounting to Rs. 146.5 billion, which were recorded as sub-loans in the CEB financial statements, into equity investment by the Government in CEB as of the end of December 2022, the outstanding debts to the bank has decreased to Rs. 239.8 billion by April from Rs. 397.9 billion recorded at the end of April last year, the report said.

Meanwhile, the expenditure on salaries and wages of public servants including Provincial Councils declined by four per cent to Rs. 303.3 billion in the first four months of this year, compared to Rs. 316.1 billion in the same period last year.

This drop was due to the increased number of retirees at the end of 2022, the suspension of recruitment to the public sector together with the revision of the compulsory retirement age to 60 years, the report added. However, the expenditure on pensions increased by 6.3 per cent to Rs. 105.9 billion in the first four months of this year, compared to Rs. 99.7 billion in the same period last year.