04 April 2013

Electricity Tariff Hike - Industries Get Biggest Subsidy, Hotels Marginally Subsidized & General Purpose Customers to Pay in Excess of Costs - an Analysis by the Regulator

02nd April 2013, www.island.lk

Industries will get an annual subsidy of nearly 15 billion rupees even after a tariff hike proposed from April, hotels will be marginally subsidized and customers classified as general purpose pay in excess of costs, an analysis by the regulator shows.

A document prepared ahead of a public consultation scheduled for April 04 by the Public Utilities Commission of Sri Lanka shows revenue from industries who were heavily subsidized already will go up to 69.9 billion from 64.9 billion rupees.

But industries would still get a subsidy of 14.7 billion rupees a year.

Customers classified as general purposes which are mostly businesses in the services sector would generate profits of 16.7 billion rupees for the Ceylon Electricity Board generating revenues of 60.1 billion rupees, and helping cross subsidize industries.

Industries have been a powerful lobby in getting power subsidies, though past tariff hikes.

Critics say some industrial customers asking for subsidies at the expense of the rest of the society include tariff protected ‘domestic production’ businesses that are already burdening the poor through high prices.

Others are more efficient export oriented industries catering to customers in rich countries.

The regulator has determined that the average cost of generating power this year would be 20.84 rupees a unit. But industries are getting power at 12.50 rupees a unit plus a 15 percent surcharge.

Other categories of industries have been offered a cut rate tariff of just 6.00 and 7.0 rupees from 22.30 to 0530 hours in the night, giving them a powerful incentive operated a late night to morning shift.

State run Ceylon Electricity Board can generate cheap power at night with coal and hydro.

They have a daytime tariff of 1130 and 10.00 rupees from 0530 to 1830 hours with a 15 percent surcharge, which is about half the average cost.

Hotels would also get a subsidy of 316 million rupees and generate 4.6 billion rupees in revenues. Religious places of worship would get a 955 million rupee subsidy and generate only 420 million rupees in revenues.

The biggest revenue gain would come from domestic customer segment, with revenues going up to 84.9 billion rupees from 50.7 billion a year earlier. Domestic users will no longer be charged as slabs but will be charged at the highest block rate for the entire monthly usage.

High end domestic users above 300 units however who were being charged rates of close to 50 rupees a unit will now be charged about 44 rupees a unit with a tariff of 32 rupees and 40 percent fuel surcharge.

In Singapore where most of the power comes from thermal combine cycle units running natural gas, larger domestic users get power at 27.60 Singapore dollar cents, which is about the same in Sri Lanka rupees.

In Singapore the daily load curve is flat, and generation is fully competitive.

Related Info :

Electricity Tariff Increase - First, Operate Hydro Plants in an Optimum Manner, Improve Plant Efficiencies, Cut Losses and Switch to more Economical Fuel

Sri Lanka Combined Cycle Power Plants more Expensive than Diesel Engines - Information on Power Sector not Available in the Past Now Coming Out

Feasibility of Solar Electricity in Sri Lanka. Overview of Solar PV Installation in Hotel Industry by SWITCH-Asia Greening Sri Lanka Hotels Programme

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