As part of the “Inclusion in the Information Society” project commenced September last year we have been studying how electricity utilities can use the almost universal mobile devices to improve the services provided to consumers. The research is ongoing, but we have not let that stop us from making use of the policy windows that open up. Early this week, the Public Utilities Commission of Sri Lanka announced that it would be accepting comments on a proposed tariff increase from the public. Based on our research, we plan to make submissions. Even before that, when a leading economic analysis program aired by Sirasa TV, asked us to speak on the subject, we gave a taste of what would be coming. The links to the program in segments (in Sinhala) are at:
[From webtv.lk home page select the SIRASA TV icon; then go to bottom of the list of programs for March 12, 2013. Artha Tharka is available in parts.]
The basis of our central argument is that the last five percent of electricity used to serve peak demand is responsible for almost 50 percent of the overall generation costs. This is because various governments delayed the building of low-cost coal-powered generators for political reasons leading to load-shedding in 2001-02. In response, high-cost diesel and fuel oil generators were commissioned. When electricity from these units are used, very high fuel costs are incurred.
Lowering the peak by five percent can stanch the enormous losses incurred by the Ceylon Electricity Board (CEB) that the government and various state banks keep covering on an ad hoc basis, destabilizing the entire economy. If, using price signals and other methods, we can do successful demand-side management, there is a possibility of containing the crisis until the Norochcholai Stage II coal generator kicks in, allowing for a more rational tariff structure to be put in place and alleviate the fiscal problems caused by horrendous CEB losses.
Demand-side management (which has additional benefits in these times of climate change) requires communication between suppliers and users. LIRNEasia believes that the almost ubiquitous mobile phone can play a critical role in this regard.