deepens for powerless CEB
By Dhanuusha Pathirana
The Ceylon Electricity Board will lose an additional Rs. 10 million
a day, due to last Sunday's price hike in furnace and diesel oil,
an official of the CEB Engineers Union said.
Secretary Noel Priyantha told the Sunday Times this was in addition
to the Rs. 47 million the CEB loses a day because of the high Thermal
Power rates. Mr. Priyantha said the cost of production of a unit
of electricity was much higher than the selling price of a unit.
country's total consumption of electricity is in the region of some
15 to 20 million units a day and because of the disproportionate
selling price the CEB is forced to undergo a loss of three rupees
for every unit sold.
buying rate of a unit of Thermal Power is about Rs. 10.50, while
the domestic selling rate is Rs. 7.70 and with the oil price hike
the Electricity Board is losing an additional .50 cents for every
Priyantha said 70% of the electricity was generated from Thermal
Power and this was not a preferable source of energy for Sri Lanka
since fuel– an essential ingredient for thermal power –
was very costly and the prices were continuously on the rise.
quantity of electricity generated using thermal power worldwide
is only 7% as the use of oil is not economical and its availability
too is rapidly decreasing. The only option then is to use coal as
a source of energy and in case of a price increase, the rate of
increase is much lower than that of fuel". he said.
Priyantha said it appeared that the agreements entered into between
the CEB and the thermal power generators have turned out to be highly
disadvantageous to the CEB.
agreement between the CEB and the thermal power generators states:
"The tariff for the supply of electrical energy to the CEB
comprises of the capacity charge and the energy charge. The above
components of the tariff are based on the oil prices as of May and
accordingly will vary over the term of the agreement. The tariff
is based on the minimum guaranteed energy amount of 697,674,432
CEB generation planning engineer, Samitha Maligaspe said the capacity
charge remained constant and basically comprises financial costs
incurred in constructing power plants including loans obtained from
banks and financial institutions by thermal power generators.
energy charge will differ according to the change in fuel prices
and includes fuel costs, maintenance costs, transporting costs (this
depends on diesel and petrol, the prices of which were increased
by Rs. 6 and Rs. 4 recently) and the cost of machine repairs during
a breakdown", he said.
Maligaspe said the CEB had to pay for the minimum guaranteed energy
amount (MGEA) of 697,674,432 units, even if the consumption of electricity
is lower than the MGEA and invariably the consumption was more often
than not lower than the quantity for which we pay.
demand for electricity is growing at a rate between 8 to 10% a year.
This is an extremely large quantity. So this increase must be catered
to, otherwise we decelerate the commercial and industrial growth
of the country and electricity breakdowns become an annoying occurrence
to the domestic consumer", the CEB Engineers’ Union Secretary
Ace power generation finance manager, Samhil Mohideen said his company
was compelled to increase the rate of electricity supplied to the
CEB since furnace oil, diesel and petrol prices have been increased.
Ace power generation thermal power plant is situated in Matara and
supplies 20 MWs of electricity to the national grid.
temporarily stalls bigger price increase
The Government had authorized the Ceylon Electricity Board
to increase the domestic and industrial service charge on electricity
by 8%, to offset the price increase in furnace oil and the heavy
losses incurred by the CEB, a top CEB official said.
said though the CEB proposed an increase of 20% in the service charge
as a means of reducing the losses, the government only agreed for
an increase of 8% but discussions for a further increase were still
of reply: LECO GM clarifies
The Lanka Electricity Company (Private) Ltd (LECO) responding
to an article in The Sunday Times of April 17 which appeared under
the heading "CEB Crisis: Either way the consumer is plugged"
says that the company is not given a subsidised rate or a preferential
rate for its electricity purchases from the CEB.
letter from the General Manager W.A.L.W.A. Perera said the article
does not indicate the CEB's average cost of generation of a unit
of electricity and the graph reproduced in the article showed only
the generation costs of thermal power stations.
of generation at hydro stations are not indicated. Average cost
of generation of a unit of electricity is determined by dividing
the sum of cost of generation (ie. cost per unit multiplied by total
units generated) at all stations supplying the system, by the sum
of units generated at all the stations, for a given period of time.
It appears that this information was not included deliberately to
mislead the reader into believing that LECO purchases electricity
below production cost", the General Manager says.
states that the Company purchasing electricity at primary substations
connected to 33 kV systems, is required to pay its share of costs
as allocated to the CEB's generation, 220/132 kV transmission and
33 kV systems. This is lower than the CEB's average selling price
of Rs. 7.68 per kWh for 2003, indicated in the graph, which is the
average selling price for energy sold to all CEB customers, including
sales to LECO.
average rate paid by LECO has been in the range of Rs. 6.03 to Rs.
6.10 per kWh. This average rate arises from the maximum demand and
energy rates to supply LECO, fixed by the CEB at the last tariff