Amid the raging debate over the Domestic Debt Optimisation (DDO) process, many media outlets did not give due prominence to one important news item that emerged on Friday. This concerned the electricity tariffs, which were raised drastically a few months ago in a cost recovery exercise. The Ceylon Electricity Board (CEB), the country’s power monopoly, had said that it was losing heavily in terms of every unit of electricity produced and consumed. According to the CEB, it was to recover this cost that the electricity tariffs were revised sharply upwards.
This naturally came as a shock to most ordinary households, whose electricity tariff increased four-fold in most cases. Saddled as they are with the high cost-of-living, most households struggled to pay the power bills on time. There were widespread calls to provide some sort of relief to the hapless consumer, who is squeezed from many sides. This also tallied with the Government’s decision to bring down the prices of many essentials and pharmaceuticals.
The Government has now taken cognizance of these calls and decided to reduce the electricity tariffs by a substantial margin, albeit by different levels for different segments or categories. The Government, the Public Utilities Commission of Sri Lanka (PUCSL) and the CEB must be commended for this initiative, which could not have come at a more opportune time from the point of view of the consumer.
Accordingly, the PUCSL has approved an overall 14.2 percent tariff reduction from yesterday (July 1). The category with consumption of less than 30 units per month will get a reduction of 65 percent of the cost. Consumers who come under the category of above 31 units and below 60 units will be charged 51.5 percent of the total cost. Those who use between 61 and 90 units of electricity will get a 24.5 percent reduction.
While we wholeheartedly welcome the overall reduction granted to households, the concessions granted to industry and services are even more significant and productive. It was no secret that many medium-scale tourist hotels were on the verge of collapse as they could no longer afford to pay their electricity bills. They had to pass on the increased costs to the patrons, but this was no magic formula as the latter too were impacted by the ongoing economic crisis. The hotel sector will now get a 26.3 percent power tariff reduction. We feel it should have been bigger, but hopefully this will be a good start.
The nine percent reduction granted to the industry category is also important. Just as in the hotel sector, many factories and industries were on the verge of closure, though the power factor was only one cause. The power bill concession will hopefully help them to stay afloat and contribute to the export effort.
Among the other highlights of the concession package are a five percent reduction on Commercial Buildings, a 16 percent overall reduction on religious buildings and places, and a 0.8 percent reduction on Government institutions. The latter category is well known for its high wastage of electricity, from air-conditioners in empty rooms to unnecessary floodlights in the compounds.
In hindsight, it is a prudent decision not to give that category a big reduction. After all, their electricity bills are paid from the public purse and giving them further concessions will burden the public further. All Heads of Government Departments and Agencies must be instructed to ensure the minimum use of electricity at their offices. In fact, this effort should be extended to households and private sector organisations as well. Even in our home, switching off one unwanted bulb will mean a substantial saving at the end of the month and the country will have to spend a little less to import coal and fossil fuel for power generation. Indeed, one can imagine the savings if five million households follow this simple step.
We are facing this predicament today because the authorities did not invest in renewable energy projects on time, primarily wind and solar. At a time when some countries can generate power on demand entirely from renewable sources, Sri Lanka is still envisaging getting 70 percent of the national grid power from renewables only in 2030. In seven years, the world will have moved even further on the renewable front.
There is even a proposal to build a Small Modular Nuclear Reactor (SMR) in Sri Lanka, which should be considered seriously from all angles – nuclear waste and storage, safety measures etc. It is also a praiseworthy idea to connect the national grids of India and Sri Lanka. “Exporting” and “importing” electricity is very common among neighboring countries in other parts of the world. It is generally a win-win situation for both countries involved.
We have to think outside the box when it comes to power generation and consumption. Perhaps the time has come to install the latest ‘smart meters’ which will give users more control over their electricity use. All options should be on the table vis-à-vis saving power.