Power sector financially sustainable, no subsidy needed - Minister

by Gamini WARUSHAMANA

Minister of Power and Energy Champika Ranawaka said that consumers have to pay the true cost of electricity if they use units generated by high cost thermal power plants. Announcing the new electricity tariff structure which will be effective from January 01 he said that the new tariff is based on “pay at the cost of units you consume”.

According to the new structure there is no tariff increase for the first 90 units. It introduces a tariff reduction for temples and religious places, average cost tariff for non-profit making Government institutions and tariff increase for the users who consume over 90 units. Accordingly hotels, factories and people who enjoy luxuries will have to pay a higher price.

Under the new tariff structure the 30 percent fuel adjustment charge has been removed. The minister said that according to the new tariff policy the power sector will be financially sustainable and no subsidy is needed from the Government. The objective is to provide basic electricity at an affordable and fair price to the consumers and charge the true cost of electricity from the consumers for their secondary electricity needs with no subsidy. While charging high tariff from high end consumers, hotels and commercial sectors special concessions will be provided for small and medium scale industries. High end consumers too have options to reduce their bills by saving energy.

Under the new system the unit rate is increased based on every 30 units consumed. Therefore a consumer who can save one unit per day can reduce his bill.

The minister said that high end consumers also have options to shift to alternative energy such as solar power. Some households have reduced their bills significantly by using solar power, he said.

The new policy also targets energy conservation for 2000 large industries which consume 80 percent of industrial power.

To reduce the peak load “time of use tariff” has been introduced for industries. The objective is to shift their operations to off peak hours of the day.

The policy also targets to encourage consumers to adopt aggressive energy conservation measures through tariff for meeting future oil price hikes.

According to the CEB the average unit cost of electricity (1Kwh) is Rs. 14.95. However, the generation cost of a unit in some power plants is around Rs. 47 per unit.

CEB can provide 72 units for each household per month from hydro power and the first 90 units consists of this cheap electricity that is owned by the people.

The ministry is also planning to increase the liquid natural gas usage in the country.

Some high cost thermal power plants will be converted into LNG in the future.

The minister said that LNG usage in the country is low compared to other regional countries and Sri Lanka has missed this viable low cost energy usage.