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AG backs Govt.’s move to overrule PUCSL and raise electricity tariffs
View(s):By Damith Wickramasekara
The Government is set to overrule the power sector regulator’s objections and push through with an average 65 percent tariff increase after the Attorney General said the law gave full authority to the Power and Energy Minister to formulate general policy guidelines for the industry.
Attorney General Sanjay Rajaratnam has also said the Public Utility Commission of Sri Lanka (PUCSL) Act empowers the Cabinet, in consultation with the Minister in charge of a public utility industry, to formulate where it sees fit, general policy guidelines and issue such guidelines through the Minister. The PUCSL “is duty-bound and obliged” to give effect to such guidelines, the AG has noted.
The proposal to increase electricity tariffs is to be presented to the Cabinet tomorrow (2) by Power and Energy Minister Kanchana Wijesekara.
Both unit and fixed charges are set to go up significantly under the proposed tariff increase.
Consumers who use between 0-30 units will see their unit price increase from Rs. 8 to Rs. 30 while those in the 31-60 unit range will see an increase from Rs. 10 to Rs. 37. Consumers using between 61-91 units too will have to pay more, with the unit price increasing from Rs. 16 to Rs. 42. There will be no increases for consumers in categories above 91 units.
Fixed price increases too will be high, with consumers in the 0-30 unit category seeing an increase from Rs. 120 to Rs. 400.
Those in the 31-60 unit range will see their fixed charges going up from Rs. 240 to Rs. 550 while those using between 61-91 units will see the fixed charge increase from Rs. 360 to Rs. 650. Consumers in the 91-120 unit range and 120-180 unit range will see fixed price increases from Rs. 960 to Rs. 1500. Consumers using more than 181 units will see an increase in fixed charges from Rs. 1500 to Rs. 2000.
Though it has only been four months since the last electricity tariff hike in August, the Power and Energy Ministry has justified the proposal for another tariff hike on the grounds that even at the current tariff level, the CEB will still incur a loss of about Rs. 287 billion in 2023. The hike is also necessary if the CEB is to provide power this year without imposing power cuts, says the Cabinet paper, a copy of which has been seen by the Sunday Times.
The PUCSL, meanwhile, has come out strongly against moves to impose yet another tariff hike. PUCSL Chairman Janaka Ratnayake has insisted that the regulator is not bound to follow any Cabinet directive instructing it to approve the CEB’s request for a tariff hike.
“There is no basis for another tariff hike just four months after the last one. The CEB anyway has been earning an operational profit since the last tariff hike,” he told the Sunday Times.
Mr Ratnayake said the new hike was being proposed with the aim of paying for coal shipments and recovering losses incurred up to August.
“If any attempt is made to bypass the regular and arbitrarily increase tariffs without even a public consultation, we will be forced to file legal action to prevent it,” the PUCSL Chairman said.
There are more than 1.6 million consumers whose monthly electricity bill is currently Rs. 200 or less, an official from the Power and Energy Ministry said.
They are from low-income groups who receive subsidies on their bills but the generation cost for each such unit is high and the Treasury is no longer prepared to cover this cost, he revealed.
Additionally, the Treasury also provides electricity subsidies to religious places, schools and hospitals.
“Overall, the Treasury provides more than Rs. 300 billion in electricity subsidies and this is no longer sustainable. Moreover, if the tariff hike is effected, the CEB will be able to provide uninterrupted power again to consumers,” the official claimed.
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