Some households paying world’s highest electricity rate
* Energy expert urges fairness & transparency, reform plans & pricing
formula already in place waiting for implementation
February 21, 2013, 9:02 pm 
By Ifham Nizam
Sri Lankan households which consume more than 300 units of electricity a month pay the highest rate per unit in the world, despite an average unit cost of Rs. 22.00 to produce a unit of electricity in the country, a renowned energy expert says, urging the government to be more fair and transparent with pricing policy while implementing reforms and a pricing formula already in place, ‘they do have to be reinvented’.
The breakeven of the CEB and CPC via cost recovery pricing formulae and reforms was one reason why a follow up programme with the International Monetary Fund (IMF) fell apart after the government said it was not ready for these (and other) reforms.
Dr. Tilak Siyambalapitiya on his presentation titled "Five Year Road Map for the Revival of the Electricity Industry in the country" organised by the National Chamber of Commerce of Sri Lanka (NCCSL) on Wednesday (20) said a Sri Lankan consumer under the large household sector pays a staggering Rs. 33.00 per unit; even a consumer of a developed nation like the US or United Kingdom don’t pay that much.
He said that when it comes to other categories –small and medium- local prices cannot be classified as either the cheapest nor expensive despite a unit being provided at Rs. 4.75 for users of less than 30 units and Rs. 8.09 for users of less than 90 units.
Dr. Siyambalapitiya strongly believes that allocation of costs to each customer category must be done accurately. He pointed out that transparency within the sector is of utmost importance.
He said that the private sector should lobby the government to be more transparent in the power sector.
He points out that Sri Lanka’s price structure is complicated and even some engineers find it difficult to understand the price structure.
He said that determining the type of customer is a nightmare which should be decided by the engineers.
He warned that the society would be deprived of the benefits of transition if the window of opportunities during 2011- 2017 were missed.
He also said that 2016-17 was very crucial as the Sampur coal power plant in Trincomalee was to be operational by that year.
He added that if the negotiations with India are not going to be successful, Sri Lanka would still have time to finance and implement this US$ 500 million power plant using other investors.
The power sector can rise from two decades of miserable financial losses by 2017, only if the Trincomalee power project is implemented on time, and until then and thereafter, the customers must be told the truth about electricity costs and prices, he added.
He also said that the implementation of large power plants, cheaper to operate such as Puttalam and Trincomalee, does bring a reduction in costs, and such benefits should be partly used to settle the debts of the sector, and partly to bring relief to electricity consumers who have been unfairly treated for nearly two decades of experiment with oil-fired power generation.
He said plans for reforms and the pricing formula are already in place, there is nothing the politicians need to rediscover. Professionals and the regulatory commission need to implement them, he said.
Dr. Siyabalapitiya also explained how the limited authority offered to the new business units of generation, transmission and distribution through the Electricity Act of 2009 and regulatory commission, being used by key institutions -policy regulatory and utility- could bring relief such as lower electricity prices in real terms, higher reliability and better customer service and how the industry could plan their future projects with the expected improvement in the power sector.
He is a graduate in power engineering from University of Moratuwa, is a PhD holder from Cambridge University. He has worked in the Ministry of Power & Energy, Ceylon Electricity Board and also in Saudi Arabia on power sector planning and policy.
He is currently an international energy consultant, working in a number of countries in Asia and Africa. He is also the Past President of Sri Lanka Energy Managers Association.
