Now is payback time

Some thoughts about electricity bills of religious places

BY Dr Tilak Siyambalapitiya

News this week that the electricity bill of a temple has increased from Rs 58,000 to Rs 300,00 per month, shows the weaknesses in the pricing structure that prevailed for decades, and the weakness that is propagated into the future by the new price structure announced from August 10th.

Year 2015 is the last year in which electricity prices approved by the Public Utilities Commission (PUC) almost matched with the costs approved by the same PUC. Since then, the gap between costs and prices has been widening. So, in 2015, the national average price was Rs 16.84 per unit of electricity. For a retail customer like a temple, church or a house, the cost is about 20% more than national average cost. Why? Because they are retail customers. So, retail customers should have been charged Rs 20 per unit of electricity since 2015.

However, owing to the decades-old practice of providing subsidies to various customer groups through the electricity bill, temples, churches, kovils were required to pay only Rs 9.40 per unit. That explains why lights are hardly ever switched off in many such premises!

So, while costs increased year by year, partly owing genuine increase of expenses, electricity prices were not increased. Increased costs were partly because of loading energy suppliers with more and more employees, and partly owing to decisions on not to build various power plants (do remember the politicians and others who delayed and cancelled Sampur, Norochcholai No 4, Kerawalapitiya and more recently, numerous wind, solar, hydro power plants) that would have produced cheaper electricity.

Count if you can, the number of times the PUC and energy ministers have boasted that they will not allow prices to be increased. Now is the payback time for that short-lived comfort. According to the electricity act, the Minister has nothing to do with electricity pricing.

So, coming back to the temple in question, to be billed Rs 58,000 each month in July, the consumption at Rs 9.40 per unit should have been about 6,200 units of electricity per month. Sri Lanka’s national average household use of electricity (typically for a household of 4 persons) is 78 units per month. So, the temple in question has used an amount of electricity used by 80 households or 320 people. It appears that commercial-scale activities may be taking place in this religious premises.

If that is the case, the temple should have requested the commercial sector electricity pricing of Rs 22.85 per unit. Then the monthly bills since 2014 until July 2022 would not have been Rs 58,000 but Rs 141,000 per month. If the temple remains “religious”, at the new price of Rs 65.00 per unit, the new bill is most likely to be about Rs 401,000, which is higher than Rs 300,000 stated in the media. So, the temple should expect a higher bill in September !

However, if the temple declares that it is “commercial”, the electricity bill will be about Rs 197,000 even after the increase.

Be that as it may, for religious or whatever customer, increasing prices from Rs 9.40 to Rs. 65.00 per unit in one go, has never been heard of. Pricing reforms are welcome but it is the PUC’s job to smoothen the price increases. Looking back at the “public consultation” in June 2022, CEB proposed the prices for high-user religious customers to be increased from Rs 9.40 to Rs 19.00. It appears PUC increased it to Rs 65.00 per unit. Was it a mistake ? A typo ?

The bottom line is that everybody is asking for subsidies, while no one likes to contribute to subsidies. If everybody is required to pay what it costs to supply, nothing more, nothing less, the electricity bill of the temple would have been Rs 163,000 until July and Rs 236,000 from August onward. Still a hefty increase, but a rational distribution of costs among the customers.

Surely, there will be requirements to support specific religious premises and indeed other types of customers, too. That is the job of the Ministry of Religious Affairs and the respective Ministries, not of the CEB and LECO. Now that it appears the politicians have let go their seven-decade old habit of interfering in electricity pricing decisions, what is required now is a strong, professional, respected PUC, which know its subject, to use the stick and bring the costs down. These costing and pricing anomalies are not of recent origin, but they need solutions.