Tuesday, August 11, 2020

The government subsidises the power and energy sector with a relief program

 

The government is making further concessions to consumers of electricity who got huge bills after the lockdown ended. At their weekly meeting today, the Cabinet of Ministers considered several consumer concessions proposed by Power and Energy Minister Mahinda Amaraweera and agreed to reduce electricity bills by 25 per cent in March, April and May when electricity consumers consumed electricity units between 0-90 units.

Co-cabinet spokesman Bandula Gunawardena said they would give those consumers a three-month grace period to pay up and they will incur no disconnections or late fees. He said Amaraweera had told the cabinet that this relief package would provide a direct advantage to around 73 per cent of in-house electricity consumers.

However, he said this relief package will cause a massive loss to the Ceylon Electricity Board (CEB) but would provide relief to those affected by COVID-19. However, despite the damages to be borne by the CEB and other providers, he said the President, the Prime Minister and cabinet members discussed further on giving more relief to electricity consumers.

Gunawardena said Minister Amaraweera asked to find out any further relief that consumers could receive through this package, such as raising the 25 per cent reduction to 120 units and presenting it to the cabinet next week for approval. He said the relief measures that he has already granted would not change, but it will not be the final decision on relief for consumers of electricity.

The state regulatory body, the Sri Lankan Public Utilities Commission (PUCSL), had proposed a formula for the CEB and the other provider Lanka Electric Company Ltd. to apply to reduce bills that became inflated when meter readers were unable to operate during the lockdown.

LECO has already implemented the formula, and its subscribers were granted the concessions as of this month. It is not known whether the relief measures proposed at the cabinet meeting yesterday would also extend to LECO customers.

OSL Take:

Sri Lanka's power and energy sector have become a hotspot for business; to explore investment opportunities in the country. The expansion and extension of the country's economy have increased the demand for power in Sri Lanka. Experts have predicted a looming power crisis in the country in the event economic activities reach high capacities. Sri Lankan authorities are therefore looking at renewable energy generation options to ensure low generation costs as well. Being a tropical country, Sri Lanka has much potential for solar and wind power generation. Foreign businesses/investors exploring business/investment opportunities could, therefore, explore business/investment opportunities in Sri Lanka's power and energy sector.

 VBS/AT/11082020/Z_TB2

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