PUCSL halts short-term emergency power purchase

by Rukshana Rizwie

Regulator of the country's energy sector, the Public Utilities Commission of Sri Lanka (PUCSL) has thwarted proposals of the Ceylon Electricity (CEB) Board to purchase power from Independent Power Producers, as part of a short-term emergency measure to avert an islandwide power crisis.

"The CEB was acting on the approval of the Cabinet Committee on Economic Management when it called for international bidders," spokesperson for the Ceylon Electricity Board Sulakshana Jayawardena said. "A contractor was selected at the lowest rate and in keeping with the CEB's requirement, however now that the PUCSL has rejected this, we've also cancelled the tender indefinitely."

Jayawardena added that the CEB will have to rely on the existing energy capacity on the national grid and economize power consumption if it was to avert a power crisis. "There is a huge risk by not forging ahead without a stand-by power purchase agreement," he added.

The CEB-based on a technical paper submitted to the Standing Cabinet Appointed Procurement Committee, called for call for proposals for the supply of Electricity on short term basis through an International Competitive Bidding (ICB) process.

The move was supported by Prime Minister Ranil Wickremesinghe who submitted a cabinet paper detailing the process by which CEB would purchase power on a short term basis under a dated Power Purchase Agreement. The advertisement calling for proposals which was publicised in the newspapers cited that the selected power plant will need to commence operation on or before April 28 and would cease operations by July 28 this year. The tender called for an aggregate capacity of 55Megawatts in three different locations.

"Due to the lack of rainfall, depleting level of water at the reservoirs, the malfunction of some of the transformers and the technical glitches at the Norochcholai power plant, the CEB was of the opinion that the country would need to go for an energy power purchase to avert a power crisis," Dr Suren Batagoda, Secretary to the Ministry of Power and Energy told the Sunday Observer.

The PUCSL however has observed that a move by the CEB to go into a short term power purchase even with cabinet sanction is a violation of Section 43 (4) (c) (ii) of the Sri Lanka Electricity Act.

Saliya Mathew, Chairman of UCSL said the Transmission Licensee (CEB) had not even justified the requirement of emergency power. Furthermore, the PUCSL also observed that that the submission made to the Commission by the CEB on the requirement of emergency power is different to what was made to the Cabinet Committee on Economic Management on which the Cabinet of Ministers arrived at their decision.

The letter sent to the CEB from the PUCSL cites that requested emergency power plants are not provided for in the Least Cost Long Term Generation Expansion Plan and that approval from the Commission should be sought prior to submitting such a proposal to the Cabinet of Ministers for their approval.

The PUCSL also found glaring discrepancies between the submission made from the CEB to the Commission and one that was submitted to the Cabinet for approval. The Commission observed that Ace Power Embilipitya Power Station which CEB had sought approval from the Commission was already added to the National Grid.

"There is a mismatch of information between the report submitted to the Cabinet Committee on Economic Management on which the Cabinet of Ministers arrived at their decision regarding the power purchase agreement and the submission made to the Commission seeking approval for the said procurement of emergency power..." The PUSCL also dismissed claims of an energy shortage on the national grid by clarifying that 380MW capacity has been added to the system based on water release from the Rantambe power station. That the Kukule Gange Power station was also in operation at its peak during the last two weeks. It noted that energy being available but cannot be delivered due to periodic transmission constraints cannot be considered an emergency.