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Electricity to meet the same fate as rice and sugar?

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Electricity to meet the same fate as rice and sugar?
(By Niluka Sandun Padmasiri | Translated by Akitha Wijayasinghe)

Consumers are concerned that electricity costs will increase when the Public Utilities Commission of Sri Lanka (PUCSL), which controlled electricity prices for 10 years without allowing it to increase so far, is to shut down.

Consumers also say that if the power of the PUCSL is given to the Consumer Affairs Authority, the same thing that happened to the prices of rice, sugar and coconut will happen to the price of electricity.

The commission also stated in a letter that it had resolved 6,000 complaints received regarding electricity, thus saving a large amount of money.

Letter from P.B. Jayasundara

Secretary to the President, P.B. Jayasundara has called for the immediate closure of the PUCSL, which has the power to regulate electricity prices, regulate water and petroleum, and intervene in consumer complaints. Mr. Jayasundara has informed this to S.R. Attygalle, the Secretary to the Treasury in writing.

The letter stated that the current staff of the commission should be attached to the respective divisions according to the merits of each employee and the technical staff should be absorbed to the Department of Physical Planning and the Ministry of Energy.

According to the letter, the powers of the commission will be vested in the Consumer Affairs Authority and the Electricity Board. As tariffs and related regulatory matters fall within the purview of the Government, it states that certain provisions of the Public Utilities Commission Act may be incorporated into the Consumer Affairs Authority and the Electricity Board Act when the Public Utilities Commission Act is replaced in the future.

“I draw your attention to the Budget Proposal to be submitted to the Public Utilities Commission and the Electricity Board on the creation of the necessary arrangements for the implementation of the long overdue power generation plan and an efficient working environment. In this context, I have been instructed to advise you to close down the Public Utilities Commission.”

Demolishing the only relief that people have

When contacted, Sanjeewa Dhammika, Secretary of the Electricity Consumers’ Association, told MediaLK that the PUCSL had been in control of electricity price being increased for so long and that nobody knows what would happen after it is abolished.

“As the consumers, this is the only relief we have. Now they are trying to demolish it,” he said.

He also said, “In the budget, the Prime Minister said that steps would be taken to expedite the Utilities Commission Act and the Electricity Board Act. Secretary to the President P.B. Jayasundara is trying to dishonour the government. As consumers, we condemn this as those who complain to this commission. There are millions of surety deposits. What will happen to these when this commission is abolished? This is the only place that electricity users can complain about when they have a problem.

“This decision was taken in complete contrary to the budget. And this is within the purview of the Prime Minister. It is not clear who gave the instructions to do this. It is doubtful whether this decision was made in collaboration with the power mafia. It is the Utilities Commission that has not allowed the increase in electricity prices for so long. It is the Electricity Board that should be responsible for the corruption, not the electricity consumer.

“They say that the Utilities Commission will not allow projects. However, permission was granted for a 100 MW wind power plant, an LNG power plant and a second LNG power plant to purchase emergency power. The CEB has not even worked on some of the approved projects yet.

“This is only good to score commissions… This is a blatant destruction of the vision of prosperity. The Minister of Power and Energy should be responsible to this. It is useless to form committees later.

“When former Minister Ravi Karunanayake was there, an attempt was made to get electricity from a Turkish ship. We fought a lot as an association. When the present Prime Minister was the Leader of the Opposition at that time, we made a request to him as an association. We sent letters to all 225 parliamentarians. We worked against it. The UNP also tried to usurp the power of this commission. We defeated it. The Prime Minister cannot do this.

“Prime Minister Mahinda Rajapaksa, who opposed this decision while in the Opposition, cannot support to eliminate it. We worked for Gotabaya Rajapaksa’s victory in the presidential election. Even that won’t help here. It is doubtful whether this is the sole work of the Secretary.

“In other words, the power of this commission is given to the Consumer Affairs Authority. How can the Consumer Affairs Authority, which cannot control the price of rice, sugar and coconut, control the price of electricity? Sugar is sold at 120/= while it should be 90/=. The same goes for rice. Then all the taxes due to the government will go to the black marketeers. Without such control, the Consumer Authority cannot do this. We strongly oppose this. We will take the matter to the streets if this happens.

“This includes not only power regulation but also water and petroleum regulation. This is a decision that needs to be taken by the Cabinet alone. This is good for commissions. Worst for the customer. All these should be pre-determined. From the day he came, this secretary has been working in a manner that embarrasses the government.

“Mr. Mahinda Rajapaksa said in his budget speech that he will make every electricity consumer an entrepreneur. Please give us the money we deserve before you make us an entrepreneur. All we have to ask for the money we own. There is an interest of about Rs. 2500 Crores.

“The Prosperity Vision Policy Statement states that illegal power plants will be removed. Instead of removing them, they are going to enforce cabinet decisions and abolish the Utilities Commission with such decisions. The Electricity Board now has a loss of Rs. 100 billion. When Mahinda Rajapaksa gave in 2015, there was a profit of Rs. 20 billion. The previous government lost Rs. 80 billion. This year too there has been a loss of Rs. 20 billion. Now the total loss is 100 billion.

“Attempts are being made to charge electricity consumers to increase the bill to make up for this loss. The Utilities Commission has so far stopped raising electricity prices. Who knows what will happen now?”

The reason behind electricity prices remaining affordable for a decade

Jayanath Herath, Director of Communications Department of the PUCSL, said that despite media propaganda to close down the commission, no official announcement has been made.

He said that the PUCSL has controlled the price of electricity so far since 2011, for almost 10 years now, without allowing it to increase. He said that 6,000 complaints regarding electricity have been resolved so far, saving the public money on court proceedings.

He explained the functioning of the Commission:

“It is created to regulate the three industries of electricity, water services and petroleum. The Commission regulates tariffs, resolves consumer issues and regulates the technical safety of these three industries. Basically, the commission is empowered by the Electricity Act No. 20 of 2009.

“We have control over tariffs regarding electricity prices. Electricity prices have been kept under control since 2011 without any increase. We also do things like electrical safety and standardization. We have taken steps to minimize the dangers from electric shocks. About 6000 complaints regarding electricity have been resolved preventing the need to go to the court. This has prevented a huge waste of money. Provided advice on fees without letting the price go up.

“Powers have not yet been given regarding water services. But it is also recommended to resolve drinking water related problems. A consumer policy has been formulated. We will also work to regulate natural gas and lubricating oil standards.

“And also regulating electric vehicle owners and planting centers is done. We carry out such a wide range of regulatory processes.”

Functions of the Commission

The Commission’s mission is to protect the rights of the consumer and to work for the betterment of the industry by creating the conditions for the licensee to properly carry out his responsibilities.

It was established as a multi-sectoral regulatory institute to regulate the physical infrastructure industries. The Public Utilities Commission of Sri Lanka Act, passed in Parliament in 2002, provided for the regulation of the power and water service industries.

In March 2006, the petroleum industry was added to the list of industries to be regulated by the Public Utilities Commission of Sri Lanka.

Now it regulates the generation, transmission, distribution, supply and use of electricity with the aim of ensuring adequate investment, efficient supply, and quality service in the power industry.

The PUCSL was established by Act No. 35 of 2002 as a multilateral regulatory body to regulate the above mentioned infrastructure industries. It has been operating as an institution since 2003 with the appointment of its first group of Commissioners and a Director General.

Acts empowering the Commission

The PUCSL was established by the Public Utilities Commission Act and by the Electricity Act No. 20 of 2009, the commission was assigned with regulating the electrical industry.

The Commission is empowered by the Public Utilities Commission Act No. 35 of 2002 and the Electricity Act No. 20 of 2009.

Lubricating oil industry

The Public Utilities Commission of Sri Lanka is the shadow regulator of the lubricant market in Sri Lanka. The task is to liberalize the lubricant market and set Sri Lankan standards.

Amendments are being made to the Petroleum Products (Special Provisions) (Amended) Act and the Ceylon Petroleum Corporation (Amended) Act, which empower the Commission to regulate the entire petroleum industry, including the lubricant market. Until those amendments come into implication, the Commission will continue to operate as the shadow regulator of the petroleum industry, in accordance with the powers vested in it.

Water Services

This includes the supply of pipe water to any urban or rural area under a public water supply system. This includes water supply by water bowser and public sewer services, but does not include irrigation water and bottled water. Under the Commission Act No. 35 of 2002, the regulation of the water service industry is vested in the Commission.

However, the Commission does not have the power to formally regulate the industry until the Water Services Industry Act becomes operative.

In early 2008, the Commission, in conjunction with the National Water Supply and Drainage Board, initiated an Act on Water Supply and Public Sewerage Services. Due to the expected regulatory role of the Water Services Industry, the Commission is in constant dialogue with the Ministry of Water Supply and Drainage.

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