Power generation and distribution plan : Govt to consider change in structure | Sunday Observer

Power generation and distribution plan : Govt to consider change in structure

Government may consider a change in the structure of power generation and distribution in the country, “if the generation plan implementation cannot be efficiently carried out within the current structure” by the Ceylon Electricity Board (CEB).

Currently the CEB carries out both generation and distribution with the Public Utilities Commission of Sri Lanka (PUCSL) having oversight over tariffs, generation plans and generation mix.

In most developed countries generation and distribution are carried out by different entities to achieve higher efficiency in a competitive environment.

The PUCSL in a report to be released this week, will recommend that this change in the industry structure should be considered if the CEB is unable to carry out the long term generation plans that have been mutually agreed between the PUCSL, CEB and other branches of the government.

PUCSL sources say that many stake holders in the industry are calling for the reform of Ceylon Electricity Board (CEB) given the tardiness in carrying out the implementation of the long term generation plan. The report is expected to show the total financial loss due to implementation delays of 2018-2020 LGEP plant schedule to be more than Rs. 50.62 billion at current phase of delays while the losses due to any further delay beyond what is forecast now, will cost Rs. 3.43 billion for each month of delay.

Other recommendation in the report will include expediting the procurement of recommended power plants, not purchasing emergency power in the future to meet any capacity or energy deficit due to implementation delays, and will also recommend that any such cost, if incurred should not be passed through to the consumers through tariffs.

The report will show that the financial losses and cost overruns are primary outcomes of implementation delays and predicts that the cumulative effects of these delays over the next three year period can very likely trigger a serious power crisis that will affect the national economy.