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Sunday, 28 April 2013

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Saving power, the only solution

The demand for power is increasing worldwide and more and more countries are turning to alternative energy sources to cushion the impact of sky-rocketing crude oil prices in the international market.

Electricity was once considered a luxury and only affluent people had access to electricity while a major portion of the country's population depended on kerosene to light up their homes.

Less than 65 percent of households mostly in the urban and semi-urban areas had electricity when President Mahinda Rajapaksa first took office in November 2005.

Although the world has entered the space age, the majority of Sri Lanka's households in villages were in darkness as kerosene was the only choice to illuminate their homes.

Nevertheless, the President felt that electricity was no more a luxury and the rural masses too should have the right to electricity, not only to light up their homes, but also for other electrical appliances such as radios, televisions, irons, refrigerators and fans. Hence, new electricity schemes were launched in the country at colossal costs to upgrade the living standards of people in rural areas.

Today, nearly 98 percent of the country's households have electricity. The aim of the Government is to provide electricity to each and every household soon. This resulted in the country's demand for power increasing by over 300MW annually.

People in the Jaffna peninsula were the worst hit when LTTE terrorism was at its peak and found it extremely difficult to obtain even kerosene. However, the end of terrorism ushered in a new lease of life for people in the North and the East. On the direction of the President, electricity was provided to every village and Jaffna was connected to the national grid after decades.

All this was done in the best interests of the people and the country's demand for power surged to an unprecedented level. In this scenario, the Government sought ways and means to meet the ever-increasing demand for power. Unlike during the UNP regime or PA era under former President Chandrika Kumaratunga, the present Government was determined to provide an uninterrupted power supply from the national grid.

The UNP Government in 1993 under Ranil Wickremesinghe decided that the state should not invest in power generation and invited small-scale power generating companies to enter the market. The Wickremesinghe-led Government signed 20 to 30-year long-term contracts to purchase electricity from these privately operated small power stations at exorbitant prices. The Government is now attempting to renegotiate the contracts signed by the previous UNP Government.

When President Rajapaksa took office as the First Citizen nearly seven-and-a-half years ago, he foresaw the increasing demand for power and built new power stations. Thanks to his foresight, three new mega power stations have already been commissioned.

The three newly constructed projects - Kerawalapitiya Thermal Power Station - Upper Kothmale Hydropower Station and Norochcholai Coal Power Station, increased the capacity of the national grid tremendously. When Phase Three of the Norochcholai Coal Power Station is completed by the end of this year, another 600MW will be added to the national grid. Construction work on the Sampur Power Station will be launched this year and this would further boost the national grid in two years.

Sri Lanka is the only country in South Asia that provides an uninterrupted power supply from the national grid. Even our close neighbour - the South Indian state of Tamil Nadu experiences a 16-18 hour power cut daily. In contrast, the Government is meeting the challenge of supplying electricity to one and all, expending a colossal sum of money to generate thermal power. The cost of producing one unit of electricity is a whopping Rs. 23.30 although consumers pay much less, thanks to the billions of rupees pumped in by the Government as subsidy.

Divergent views have been expressed on the proposed increase of electricity tariffs from next month. The Government was compelled to take this painful decision as it is already incurring a massive subsidy on electricity. Electricity rates would have been maintained at the prevailing rates, had the Government imposed power cuts. People from all walks of life were affected when power cuts were imposed in the past and industrialists too were adversely affected.

Hence, the Government does not wish to take the masses back to that dark era again. There was a time when only the rich enjoyed uninterrupted power through fuel-operated mini generators while the masses were groping in the dark. Despite the new tariff structure, the Government will continue to supply power at a subsidised rate.

It is deplorable that opportunist Opposition politicians are doing their damnedest to gain petty political mileage. Though they shout from the rooftops that the poorest of the poor would be the worst affected, this is furthest from the truth.

The increase for over 1.1 million households which use less than 30 units per month, is a mere Rs. 75 per month. Similarly, 1.3 million households which use between 31 and 60 units per month would pay an additional Rs. 174. Consumers who use between 61-90 units per month would only bear an extra Rs 433 monthly. Over 70 percent of the total electricity consumers belong to these three categories.There is no gainsaying the fact that the electricity bills of all households were comparatively less during those dreadful days when day and night power cuts were the order of the day under the UNP regime and people were deprived of electricity for a greater part of the day.

We also recall those frightful days when the JVP ordered people not to switch on lights in 1988/89. The self-same people who kept the country in darkness - the UNP due to its inability to provide an uninterrupted power supply and the JVP due to its 1988/89 insurgency when they blasted transformers, are now shouting themselves hoarse on the tariff revision.

Some Western diplomats who are showing extraordinary concern about electricity are even attempting to interfere in the country's internal affairs. Is it right on their part to seek an appointment with the chairman of the Ceylon Electricity Board to discuss the tariff revision? They should bear in mind that they too have contributed in no small measure to the tariff revision.

Sri Lanka had used Iranian light crude oil at the Sapugaskanda Refinery. But the recent sanctions imposed on Iran prevented Sri Lanka from using this special crude oil for which the country's only refinery was designed. Efficiency-wise, it was far better in the oil refining process.

Since Sri Lanka is now compelled to purchase crude oil from other markets due to the sanctions against Iran, the production costs of oil used to generate power and other purposes are also comparatively high. Had these countries been so concerned about the people's well-being in Sri Lanka, they should have permitted the Government to purchase crude oil from Iran, which was offered at special rates.

Right-thinking people are acutely aware that the Government spends billions of rupees to subsidise fertiliser and electricity. Apart from the massive fertiliser subsidy provided from 2006 in keeping with the Mahinda Chinthana, the Government continues to provide electricity at the subsidised rate of Rs 481.50 per month to 1,111,125 families who use less than 30 units per month. The Government also continues to provide a subsidy of Rs 852 per month to 1,318,755 families who use 31-60 units while it provides a subsidy of Rs 936 per month to 1,299,301 families who use 61 -90 units.

This alone is ample testimony that the Government will continue to spend millions of rupees to provide electricity at subsidised rates even after the proposed increase comes into effect next month. To cap it all, the Government spends billions of rupees on free health and education.

The surcharge the CEB had to bear due to the fuel price revision in 2012 was Rs 43 billion. A litre of furnace oil, needed for power generation, increased from Rs 45 to Rs. 65, while the low sulphur furnace oil increased from Rs 50 to Rs 70 from February last year. This resulted in the CEB spending an additional Rs. 25 billion on its fuel adjustment charge.

The crisis deepened further as the price of furnace oil and sulphur increased again from Rs 65 to Rs 90 and Rs 75 to Rs 100 from this month. The additional surcharge the CEB has to bear due to the latest increase is Rs 28 billion. Hence, the electricity tariff revision was inevitable.

Whatever said and done, the proposed increase will have the least effect on low income families. Saving power and going for alternative energy sources is the only solution to face future challenges.

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