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17 December, 2010 02:14 PM Source: Lanka Business Online - LBO

Dec 16, 2010 (LBO) - Sri Lanka's industries and hotels will face sharply higher power costs of around 25 to 100 percent under new tariffs proposed for 2011, industry representatives told a public hearing called by the regulator.

Sri Lanka's industry has been getting subsidized power, though most of the subsidies went to domestic users below 90 units a month.

Sri Lanka's manufacturing industries in ceramics, rubber and others will have to bear extra power expenses between 20-40 percent next year industry representatives said.

Sri Lanka top cement maker, Holicim, a unit of a Swiss based group said its annual power cost will go up by 370 million rupees.

Its Puttalam plant, which now pays about a billion rupees is believed to be the single largest customer of the CEB, the hearing called by the Public Utility Commission was told. The new tariffs will add 14 rupees per bag of cement produced, an official said.

Large industries were getting power at 9.10 rupees with a mechanism to charge for peak hours. Under the new rates industry will have three charge bands of 16.50 rupee for 'peak,' 8.70 for off-peak, and 11.50 for day.

Off-peak charging is to encourage industries to run night shifts in the early hours of the morning.

Puttalam cement says it is already running plants 24 hours and other industries complained that current labour laws do not allow females to work after 10.00 pm.


Sri Lanka's top hotels which were paying the subsidized 'industrial' rate had been put on a higher rate in the proposed tariffs. The new hotels rate is 19.50 a unit.

An industry representative said top city hotels said will have to pay 120 million rupees more in power costs next year.

Hotels are the industry sector that is benefitting most from the end of a 30-year war and was now doing well but the representative said for years the sector had suffered, and requested that they be put in the industry category whatever its rate.

However industry wants their rate reduced.

The Public Utilities Commission of Sri Lanka's public hearing on proposed rates is the first exercise of its kind, under a new electricity law which aims to make the CEB break-even by 2014 and have it make profits by 2015 by selling 'cost reflective' power to consumers.

Under approved expenses for the power utilities for 2011 the regulator has estimated costs to be 19.14 rupees a unit but government subsidies would bring it down to 14.95 during the first six months of next year.

The bulk of the subsidy goes to domestic customers who use below 90 units and get power at 3.00 rupees, 4.70 and 8.50 (proposed - 7.50 current) on each 30 unit block of electricity.

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