COPE rebukes CEB for purchasing power at higher prices

It was revealed during yesterday’s meeting between the Committee on Public Enterprises (COPE) and the Ceylon Electricity Board that the CEB had continuously purchased power for higher prices from the Ace Power Plant located in Embilitpitya.

As a result, the CEB incurs an annual loss of nearly Rs. 300 million when purchasing electricity from the said power plant, COPE members further revealed.

Although the amount invested in the Ace Power Plant was recovered by 2015, the payments for a unit of electricity had been made according to an old price formula, continuously including the capital cost every time electricity was purchased thereafter.

When COPE member MP Harsha de Silva asked for how many years the CEB had been buying power from the Ace Power Plant, the Additional CEB General Manager (Transmission Division) Palitha Hendahewa said the initial agreement was between 2005 - 2015.

He also stated that the cost of a unit of electricity is now at Rs. 95.20. CEB’s Acting General Manager Dr. Rohantha Abeysekara explained that this includes a capacity charge and an energy charge. The capacity cost has not changed, although the energy cost fluctuates in line with the diesel prices, he added.

MP Harsha de Silva questioned as to why a capacity charge and an energy charge are included when the total capital investment has been recovered already.

However, COPE Chairman Prof. Charitha Herath stated that as per the documents provided by the Public Utilities Commission (PUCSL) for the month of June, a unit of electricity is purchased from this power plant for Rs. 101.16 and that 95 per cent of the capacity charge is included in this.

Meanwhile, a CEB official explained that if the power plant in Embilipitiya is not considered, the Southern Province would face a risk of experiencing 10-hour long power interruptions. “There was an urgency at the time to quickly purchase power and we could not wait for tenders to be called. So, we extended the agreement with them.

It was revealed that approximately 40 - 60 million units are being purchased from the Ace Power Plant at the moment.

“Let’s say it’s 50 million units and if you multiply the difference which is Rs. 6.00, it amounts to Rs. 300 million,” MP Harsha de Silva stressed, adding that the numbers the CEB has presented are different to that of the figures COPE is provided with. “So, carry out the audit. The audit should not be conducted only for the Ace Power Plant but for all power plants. The biggest accusation in the country right now is that power is bought for higher prices when it could be brought for lower prices in reality.”