Charitha Herath Raises Concerns Over Power Sector Reform Bill, Calls for Review

COLOMBO (News 1st); MP Charitha Herath has raised serious concerns about the proposed electricity sector reform bill, urging a thorough review before its enactment.

In a letter addressed to Power and Energy Minister Kanchana Wijesekera, Herath highlights 16 key issues he believes could threaten the effectiveness and sustainability of the proposed reforms.

The proposed bill aims to unbundle and restructure the Ceylon Electricity Board (CEB). 

Charitha Herath argues that a robust, transparent evaluation is crucial. 

He criticizes the lack of accompanying analysis reports and emphasizes the need for comprehensive technical, economic, and risk assessments.

MP Charitha main concerns center around the following areas:

• There is concern over the potentially disproportionate authority granted to the Minister.

  
   

• The transfer of CEB assets, particularly ownership of the National Grid, lacks clear definition, with clarity restricted to the ownership of Generation Entities’ assets.

  
   

• The selection process for new institutions' leadership lacks professionalism and transparency, while asset transfer procedures and regulator independence require further clarification.

  
   

• Several critical aspects, such as consumer protection, dispute resolution, and stakeholder consultation mechanisms, are missing from the proposed legislation.

  
   

• No mention of CEB-owned subsidiaries anywhere in the Act requires clarification.

Herath urges the Minister to address these concerns and conduct a thorough review before submitting the bill to Parliament. 

He emphasizes the importance of a more comprehensive and transparent approach to ensure the success of the reforms and gain public trust in the transformation of Sri Lanka's electricity sector.

The 16-points mentioned in the letter are as follows: 

1. Ministerial Authority: There is concern over the potentially disproportionate authority granted to the Minister.

2. Disparities in Objectives: Notable disparities between the objectives outlined in the report of the Cabinet-appointed committee and the Act are observed.

3. Selection Mechanism Transparency: The proposed mechanism for selecting and appointing individuals to institutions lacks professionalism and transparency.

4. Rigid Timelines: The reform timelines appear aggressive, providing limited flexibility for necessary corrections.

5. Automatic Activation Challenges: Automatic activation of Act provisions may hinder changes in government policy without amending the Act.

6. Harmony with Existing Acts: Lack of harmony with other Acts, such as the Sri Lanka Sustainable Authority Act No.35 of 2007, raises concerns of potential overlap of powers and obligations.

7. Least Cost Principle: The least cost principle is not ensured, having been replaced with ‘at least at economic cost,’ which includes externalities.

8. Asset Transfer Clarity: The transfer of CEB assets, particularly ownership of the National Grid, lacks clear definition, with clarity restricted to the ownership of Generation Entities’ assets.

9. Regulator Independence: The Minister’s ability to provide guidelines without restrictions poses a potential challenge to the independence of the Regulator.

10. Regulator Funding: The independence of the Regulator is further threatened due to inadequate authorities provided and the absence of a defined annual levy for licensees to pay to the Regulator.

11. Ministerial Authority on Policy Guidelines: Sole authority of the Minister to issue policy guidelines preventing monopolies, anti-competitive practices, collusion, abuses of a dominant position, and resultant merger situations is a point of concern.

12. Ministerial Discretion on Incentives: Ministerial discretion to grant incentives for private sector investments in Renewable Energy and other technologies warrants careful examination.

13. Dispute Resolution and Customer Safety: Lack of provisions for dispute resolution and customer safety is a notable gap.

14. Consumer Protection: The absence of provisions for Consumer Protection throughout the Act is a matter of concern.

15. Stakeholder Consultation: Optional stakeholder consultation for the preparation of Transfer Plans by the Power Sector Reform Secretariat raises questions regarding inclusivity.

16. CEB-Owned Subsidiaries: No mention of CEB-owned subsidiaries anywhere in the Act requires clarification.