The country’s energy regulator last week shot down another request by the Ceylon Electricity Board (CEB) to buy emergency power from an unknown high-cost source. The latest request to buy 55 megawatt (MW) of emergency power was flat out rejected by the Public Utilities Commission of Sri Lanka (PUCSL) on the grounds the CEB had not only violated the Sri Lanka Electricity Act but also had misled the Cabinet of Ministers and PUCSL itself.
According to the PUCSL, the requested 55 MW emergency power from an undisclosed party is neither a least cost option nor justified adequately, instead has misled the Cabinet committee on economic management. This is the second such instance the CEB made requests for emergency power within a short span of five days.
The PUCSL said there was adequate generation capacity and energy in the system for three months from April to June 2016. On April 1, the CEB wrote to the PUCSL seeking permission to purchase high-cost thermal power from Ace Power Embilipitiya (Ace), of which the power purchase agreement (PPA) lapsed a year ago after 10 years of operation.
The second such request to buy another 55 MWs was made on April 5 - just a day prior to the signing of the PPA with Ace Power for 100 MWs. The CEB signed the agreement with Ace Power on April 6 when the regulator saw no requirement to buy such power. To this effect, the CEB bypassed the regulator and obtained the approval from the Cabinet on March 30 and did not wait for the PUCSL’s response, which came on April 7.
In fact, the PUCSL, in its letter dated April 7, questioned the rationale for seeking permission from it when the CEB had already obtained the Cabinet approval on March 30 to purchase electricity from Ace for one year as a contingency plan. The regulatory also pointed out the differences between the information provided by the CEB to it and to the Cabinet. The CEB in its letter to the PUCSL dated April 19 stated a requirement of additional 55 MWs of emergency power over and above Ace’s 100 MWs “to build up Samanalawewa reservoir level until the next rain season, which is expected in early June this year.” The report to the Cabinet submitted on March 28 said that only the “95 MWs in the Block 1 are sufficient to this issue.” Further, in Block 2, while the requirement as stated in the report to the Cabinet was 40 MWs, the letter sent to the PUCSL stated the requirement was only 20 MWs. Meanwhile, PUCSL said that power transmission constraints when energy being available could not be considered as emergencies to justify power purchasing from private parties. “Hence, the commission decided not to grant permission for the procurement emergency electricity power (55 MWs) as requested vide your letter dated April 5, 2016,” PUCSL Chairman Saliya Mathew said in his letter dated April 22 to CEB General Manager M.C. Wickramasekara.