The temporary fuel adjustment surcharge the Ceylon Electricity Board introduced in February last year to offset thermal power generation costs has continued for one year despite assurances it would be withdrawn within months. As a result, the CEB doubled its profits last year. Whilst the surcharge earned it Rs. 25,430 million, its profits for last [...]

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CEB continues surcharge; President promised to withdraw it

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The temporary fuel adjustment surcharge the Ceylon Electricity Board introduced in February last year to offset thermal power generation costs has continued for one year despite assurances it would be withdrawn within months.

As a result, the CEB doubled its profits last year. Whilst the surcharge earned it Rs. 25,430 million, its profits for last year stood at Rs 21,090 million.
This is despite the CEB being able to revert to hydropower generation within months after the introduction of the fuel adjustment surcharge, which sharply increased consumer electricity bills.

The assurance to withdraw the surcharge came last year from President Mahinda Rajapaksa. He told a breakfast meeting with media representatives it was a temporary measure taken to reduce losses. With the second and third phases of the Norochcholai power plants working, he said, it would be possible for the Government to remove the surcharge.

However, CEB Chairman W.B. Ganegala claimed yesterday that the fuel adjustment surcharge would have to remain unchanged. “This is because we have to pay back arrears to the Ceylon Petroleum Corporation for fuel supplies, loans taken from state banks and payments due to independent power suppliers,” he told the Sunday Times. This was despite the CEB registering profits last year, he said.

Mr. Ganegala said that breakdowns at the Norochcholai thermal power plants for several weeks led to enhanced production of thermal power. “Whilst hydropower production declined to 12 per cent, thermal power generation went up to 85 per cent,” he argued.

He said a fuel adjustment surcharge refund, at least in part, would be possible if hydropower generation increased. For this, he saod hydropower generation should increase to about 60 per cent and the third phase of the Norochcholai project should come into operation.

Disputing Mr. Ganegala’s claims, the National Movement for Electricity Consumers said that since both phases of the Norochcholai were now functional, it would be easy for the CEB to withdraw the fuel adjustment surcharge.

Its President, Bandula Chandrasekara said assurances to withdraw the surcharge within months were made when it was imposed. He said that hydropower generation had increased due to heavy rains in the catchment areas and therefore it was unfair to continue with the surcharge.

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