Power and Energy Minister’s proposal:

No hike in power tariff

Five year moratorium on way:

Chamikara Weerasinghe

The Power and Energy Ministry will submit a proposal to the Public Utility Commission to look into possibilities of reducing electricity prices to benefit consumers as the Ministry will prevent electricity production costs from going up under its power sector reforms for the next five years.

Power and Energy Minister Champika Ranawaka yesterday said they will stabilize the unit cost of electricity production.

He said the current production cost of electricity, which is Rs 17.50 per unit will be stabilized under the Power and Energy Ministry’s Power-Lanka, Vision for Future Energy 2010 program.

Minister Ranawaka said they will submit a proposal to the Public Utility Commission, not to increase electricity tariffs for five years, or even to reduce electricity prices during the course of the next two years.

He said the Power and Energy Ministry has stepped up action to convert its high-cost thermal power plants to low-cost thermal plants as a short-term measure to cut down its energy generation costs.

Oil prices in the market can more or less affect their efforts. Nevertheless, the Minister said, the world’s highest charges for electricity is in Sri Lanka.

Asked how the Ceylon Electricity Board (CEB) will be converted to a profit making institute under Power-Lanka Energy Reforms, if they further cut down electricity prices given that the CEB is selling electricity at a price of Rs.13 per unit, that is lower than its production cost of Rs.17.50 per unit, Ranawaka said, they have plans to generate income by other means such as expanding its services, eliminating electricity wastage and increasing efficiency of the services.

The CEB loses its income mainly due to high costs involved in thermal power generation as 65 percent of the country’s power generation comes from thermal plants with 75 percent of the income generated by the CEB through both hydro and thermal plants going to cover their operational costs, the Minister said. This is one the main reasons that the CEB is unable to give benefits to the public, he said.

Further explaining how he plans to make the CEB an economically viable institute, the Minister said, All idle assets of the CEB will be mobilized for services with private sector participation.

The Power and Energy Ministry has investments worth of Rs. 322 billion, which we plan to persuade the private power sector to take part, he said.

The Ministry will bring in “diversified energy mixture” to stabilize its electricity production costs with a large number of private power providers entering the power sector with thermal, hydro, wind and sloar power projects to slim down the mammoth of electricity production costs.