Electricity tariff revision not too difficult for low income families - Minister

Sandasen Marasinghe and Disna Mudalige

The electricity tariff was revised in a manner that affects less for low income families and more for high income families, said Power and Energy Minister Pavithradevi Wanniarachchi in Parliament yesterday.

The minister made this observation in response to a special statement made by Chief Opposition Whip John Amaratunga under the Standing Order 23 (2).

According to the electricity tariff revision, the consumers who use less than 30 units would have to bear additional Rs 75 monthly, the consumers who use 31-60 units would have to bear additional Rs 174 monthly, while the consumers who use 61 to 90 would have to bear additional Rs 433 monthly. She said about 70 percent of the total consumers of the country belongs to these three categories.

The minister said the government provides a subsidy of Rs 481.50 to each of 1,111,125 families who use less than 30 units. The government provides a subsidy of Rs 852 to each of 1,318,755 families who use 31 to 60 units while it provides a subsidy of Rs 936 to each of 1,299,301 families who use 61 to 90 units.

She said the construction of the Norochcholai power plant would be completed by the mid of the next year. Soon after its commissioning, benefits would be given to the consumers.

She said after Rs 358 million loss of the Ceylon Electricity Board (CEB) in 2010, it had been incurring losses in 2011 and 2012. The loss in 2011 was Rs 19 billion. The expenditure of the CEB was Rs 156 billion where as the income was Rs 137 billion in 2011. The main reason for this situation was fuel prices and the inability of the CEB to control the prices of power purchasing from private power plants. The loss of the CEB in 2012 was Rs 61 billion. The expenditure was Rs 231 billion where as the income was Rs 170 billion. The estimated expenditure of the board for this year was Rs 231 billion. From this, Rs 151 billion is for power generation with Rs 42 billion for fuel for power generation by the CEB, Rs 90 billion for fuel when purchasing power from private power plants, and Rs 19 billion as the capacity charge.

The surcharge, the CEB had to bear due to fuel prices revisions in 2012 was Rs 43 billion. Since February, 2012 one liter of furnace oil required for power generation was increased from Rs 45 to Rs 65, while the low sulfur furnace oil was increased from Rs 50 to Rs 70. The fuel adjustment charge added Rs 25 billion to the CEB and the crisis deepened. From April 1, the furnace oil and sulfur prices were once again increased from Rs 65 to Rs 90 and Rs 75 to Rs 100. The surcharge, the CEB has to bear due to this increase is Rs 28 billion. When this amount is added to the total expenditure of the CEB, it raised up to Rs 256 billion. The income when calculated to the unit prices before the tariff revision was Rs 178 billion. The electricity tariff revision was unavoidable. It has been carried out in a manner that affects less for the low income families compared with its effect on high income families.

She said her attention has been directed to the allegations of corruption and irregularities within the CEB. She said she needs a fair time to deal with these matters. She said the CEB has to pay interests for bank loans it has obtained, and this amount can only be reduced through a proper financial management.

Chief Opposition Whip John Amaratunga inquired, on what basis, the government increased the electricity tariff and the formula used to calculate the revisions. He said low income families have to bear a heavy burden from new revisions.