Proposals for CEB restructuring to be presented to Cabinet next week – Minister

Minister of Power and Energy, Kanchana Wijesekera, announced that a comprehensive proposal pertaining to the restructuring of the Ceylon Electricity Board (CEB) is scheduled for submission to the Cabinet next week.

Minister Wijesekera further emphasized that a mechanism will be developed immediately for a systematic approach to revise the electricity bill once every six months.

The Minister made these remarks during a press conference held today (23), at the Presidential Media Centre (PMC), under the theme ‘Collective Path to a stable country’.

The Minister providing additional insights remarked that the Public Utilities Commission had recently approved a revision of electricity tariffs for the Electricity Board. Consequently, preparations we made to implement an approximate 18% rate adjustment, effective from the 21st of October, with subsequent rate evaluations for the coming months.

This price revision adheres to the government’s policy framework established in conjunction with the International Monetary Fund (IMF). Pursuant to this framework, no state enterprise is permitted to draw funds from the Treasury to cover its financial losses. Consequently, a specialized price formula has been devised for both the Electricity Board and the Petroleum Corporation.

Addressing a prevalent misconception within society, the Minister clarified that the Electricity Board is not confined to revising tariffs only twice a year. Provisions are in place for tariff adjustments in cases of emergency and the necessary cabinet approval has been secured for this purpose.

Furthermore, the Minister also revealed the on-going restructuring efforts of the Electricity Board. The proposals for this endeavour were previously submitted and are presently under consideration by the Legal Draftsman’s Office. The office has finalized its review and has forwarded the proposal to the Attorney General.

On a positive note, the Attorney General recently conveyed plans to provide the requisite clarifications within the week, thus facilitating the proposal’s presentation to the Cabinet in the forthcoming week. These developments indicate a significant step forward in the restructuring program.

Moreover, it has come to the attention that there is a prevailing public sentiment regarding the need for a tariff revision due to the current heavy rainfall. It is pertinent to note that not only the Matara district, which I have the privilege of representing, but also the neighbouring Galle district and the Gampaha district have experienced flooding as a result of these meteorological conditions.

In light of recent heavy rainfall and its implications for electricity production, it is essential to recognize that the primary reservoirs responsible for hydroelectric power generation, namely Samanala Lake, Victoria, and Randenigala, remain within their existing capacities. The rainfall in these regions has been below the typical levels.

“As of today, we are utilizing only 65.81% of the reservoir capacity, a stark contrast to the 84.41% capacity utilization observed by October 22, 2022. This represents a considerable 20% decrease.

Comparatively, the hydroelectricity production from our reservoirs in 2022 reached 5,364 gigawatt hours, a significant decline from 5,639 gigawatt hours in 2021. By October 22, 2023, the figure stands at 2,893 gigawatt hours, only half of the corresponding output in the preceding years. With a mere 70 days remaining in the year, there is uncertainty regarding our ability to meet these targets. 

Consequently, the exploration of alternative measures is imperative to ensure the continued supply of electricity.

On Sunday (22 Oct.), State Minister of Finance Shehan Semasinghe stated that measures are underway to expedite the procedure of restructuring public institutions.

Semasinghe pointed out that the restructuring programme of loss-making state institutions is currently being carried out successfully, in order to provide solutions to the current economic crisis.

Earlier this year, it was discussed that the CEB would be restructured in a manner in which the management structure of the CEB will undergo reforms so as to enable renewable energy generation to be promoted within Sri Lanka with the support of government, and private and public partnerships.

The Cabinet of Ministers, on 17 April, approved the proposed roadmap and timeline of the Ceylon Electricity Board (CEB) restructuring process.